Question: Consider a 10-year project with the following information: initial fixed asset investment = $341,000; straight-line depreciation to zero over the 10-year life; zero salvage value;

Consider a 10-year project with the following information: initial fixed asset investment = $341,000; straight-line depreciation to zero over the 10-year life; zero salvage value; price = $37; variable costs = $20; fixed costs = $124,000; quantity sold = 105,430 units; tax rate = 34%.

What is the percentage sensitivity of OCF to a change in variable cost per unit? (Round answer to 2 decimal places. Do not round intermediate calculations) Answer should be a percentage.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!