Consider a four-year project with the following information: initial fixed asset

Question

Consider a four-year project with the following information: initial fixed asset investment = $440,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $25; variable costs = $15; fixed costs = $130,000; quantity sold = 73,000 units; tax rate = 35 percent.

How sensitive is OCF to changes in quantity sold? (Round your answer to 2 decimal places. (e.g., 32.16))

Consider a four-year project with the following information: initial fixed asset investment = $440,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $25; variable costs = $15; fixed costs = $130,000; quantity sold = 73,000 units; tax rate = 35 percent.

Explanation / Answer

Operating Cash flow = [(Price

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