We are evaluating a project that costs $843,617, has an eight-year life, and has no salvage...

We are evaluating a project that costs $843,617, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 56,500 units per year. Price per unit is $41, variable cost per unit is $17, and fixed costs are $417,515 per year. The tax rate is 35%, and we require a return of 22% on this project.

In percentage terms, what is the sensitivity of NPV to changes in the units sold projection?

(Round answer to 2 decimal places. Do not round intermediate calculations)

Expert Solution

jeff jeffy answered 1 year ago

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We are evaluating a project that costs $843,617, has an eight-year life, and has no salvage...

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