QUESTION
109. We are evaluating a project that costs $1.68 million, has a 5-year life, and has no salvage value. Assume depreciat
Category: Business
Subject: Finance
Due Date: 02/03/2016
Question Asked: 2016-02-03 03:35:51
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109. We are evaluating a
project that costs $1.68 million, has a 5-year life, and has no salvage value.
Assume depreciation is straight-line to zero over the life of the project.
Sales are projected at 82,000 units per year. Price per unit is $43.29,
variable cost per unit is $22.18, and fixed costs are $623,000 per year. The
tax rate is 34 percent, and we require a 10 percent return on this project.
What is the sensitivity of NPV to a 100 unit change in the sales figure?
A. $3,998.40
B. $4,609.18
C. $4,897.20
D. $5,281.55
E. $5,557.12
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109. We are evaluating a project that costs $1.68 million, has a 5-year life, and has no salvage value. Assume depreciat
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Posted on 2016-02-03 03:35:51
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...es are projected at 82,000 units per year. Price per unit is $43.29, variable cost per unit is $22.18, and fix...
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