We are evaluating a project that costs $832,000, 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 at 40,000 units per year. Price per unit is $40, the variable cost per unit is $15, and fixed costs are $728,000 per year. The tax rate is 35 percent, and we require a return of 18 percent on this project. a. Calculate the accounting break-even point. b. Calculate the base-case cash flow and NPV. c. What is the sensitivity of NPV to changes in the sales figure?d. Calculate the change in NPV if sales were to drop by 500 units. e. What is the sensitivity of OCF to changes in the variable cost figure?

Which of the following statements is correct? a major disadvantage of a partnership relative to a corporation is the fact that federal income taxes must be paid by the partners rather than by the firm itself. in a typical partnership, liability for other partners’ misdeeds is limited to the amount of a particular partner’s investment in the business.true in a limited partnership, the limited partners have voting control, while the general partner has operating control over the business, and the limited partners are individually responsible, on a pro rata basis, for the firm’s debts in the event of bankruptcy. partnerships have more difficulty attracting large amounts of capital than corporations because of such factors as unlimited liability, the need to reorganize when a partner dies, and the illiquidity of partnership interests.