A 5-year project is expected to generate annual sales of 9,600 units at a price of $83
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Question:
A 5-year project is expected to generate annual sales of 9,600 units at a price of $83 per unit and a variable cost of $54 per unit. The equipment necessary for the project will cost $373,000 and will be depreciated on a straight-line basis over the life of the project. Fixed costs are $225,000 per year and the tax rate is 22 percent. How sensitive is the operating cash flow to a $1 change in the per unit sales price?
a. $5,185
b. $5,574
c. $7,488
d. $5,962
e. $6,739
Related Book For
Understanding Basic Statistics
ISBN: 978-1111827021
6th edition
Authors: Charles Henry Brase, Corrinne Pellillo Brase
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