Use cells A6 to C17 from the given information to complete this questions. You must use the built-in excel function to answer this question. Don't worry about the numbers that are answered, they are all correct! Just help me figure out the remaining four please! 2345678910BCDEAWe are evaluating a project that costs $845,000, 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 at51,000 units per year. Price per unit is $53, variable cost per unit is $27, and fixed costs are $950,000per year. The tax rate is 22 percent, and we require a return of 10 percent on this project.a. Calculate the accounting break-even point. What is the degree of operating leverage at theaccounting break-even point?b. Calculate the base-case cash flow and NPV. What is the sensitivity of NPV to changes in the quantitysold? Explain what your answer tells you about a 500-unit decrease in the quantity sold.c. What is the sensitivity of OCF to changes in the variable cost figure? Explain what your answer tellsyou about a $1 decrease in estimated variable costs.Input area:Initial costProject lifeUnits salesPrice/unitVariable cost/unitFixed costsTax rateRequired returnb. New quantity for calculation1112131415161718192021222324 a. Depreciation per year25Accounting break-even26Projected sales changec. New VC for calculationProjected VC changeOutput area:DOL27 b. Base OCF28Base NPV29OCF at new quantity30NPV at new quantity31DNPV/DQ32Change in NPV for given quantity change33 c. OCF3435$845,000.00DOCF/DVCChange in NPV for given VC change851,000$53.00$27.00$950,000.0022%10%52,000(500)$28.00($1.00)(Use cells A6 to C17 from the given information to complete this question. You must use the built-in Excel function toanswer this question. The OCF must be calculated using the depreciation tax shield approach.)$105,62540,600.969.994$316,517.50$843,597.50$336,797.50$951,789.81F$276,737.50($39,780.00)GHI

As per instruction, the formula for empty cells will be provided. Please note that there are only 3…

Use cells A6 to C17 from the given information to complete this questions. You must use the built-in excel function to answer this question. Don't worry about the numbers that are answered, they are all correct! Just help me figure out the remaining four please!

Use cells A6 to C17 from the given information to complete this questions. You must use the built-in excel function to answer this question. Don't worry about the numbers that are answered, they are all correct! Just help me figure out the remaining four please!

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter11: Cash Flow Estimation And Risk Analysis

Section: Chapter Questions

Problem 4P: Although the Chen Company’s milling machine is old, it is still in relatively good working order and...

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Although the Chen Company’s milling machine is old, it is still in relatively good working order and would last for another 10 years. It is inefficient compared to modern standards, though, and so the company is considering replacing it. The new milling machine, at a cost of $110,000 delivered and installed, would also last for 10 years and would produce after-tax cash flows (labor savings and depreciation tax savings) of $19,000 per year. It would have zero salvage value at the end of its life. The project cost of capital is 10%, and its marginal tax rate is 25%. Should Chen buy the new machine?
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