Consider a project to supply Detrolt with 27,000 tons of machine screws annually for automobile production. You will need an Initlal $5,000,000 Investment In threading equipment to get the project...

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Extracted text: Consider a project to supply Detrolt with 27,000 tons of machine screws annually for automobile production. You will need an Initlal $5,000,000 Investment In threading equipment to get the project started; the project will last for 5 years. The accounting department estimates that annual fixed costs will be $1,200,000 and that varlable costs should be $225 per ton; accounting wll depreclate the Initlal fixed asset Investment stralght-line to zero over the 5-year project life. It also estimates a salvage value of $575,000 after dismantling costs. The marketing department estimates that the automakers will let the contract at a selling price of $332 per ton. The engineering department estimates you will need an Initlal net working capital Investment of $480,000. You require a return of 11 percent and face a tax rate of 22 percent on this project. a. Suppose you're confident about your own projections, but you're a little unsure about Detrolt's actual machine screw requirement. What Is the sensitivity of the project OCF to changes In the quantity supplled? (Do not round Intermedlate calculations and round your enswer to 2 decimal places, e.g., 32.16.) b. What Is the sensitivity of NPV to changes In quantity supplled? (Do not round Intermedlete calculations and round your answer to 2 decimal places, e.g.., 32.16.) c. Glven the sensitivity number you calculated, what Is the minimum level of output below which you wouldn't want to operate? (Do not round Intermedlate calculations and round your answer to the nearest whole number, e.g., 32) a. AOCF/AQ b. ANPVIAQ Minimum level of output C.