Question: Consider a 5-year project with the following information: initial fixed asset investment = $440,000; straight- line depreciation to zero over the 5-year life; zero salvage

 Consider a 5-year project with the following information: initial fixed asset

Consider a 5-year project with the following information: initial fixed asset investment = $440,000; straight- line depreciation to zero over the 5-year life; zero salvage value; price = $27; variable costs = $20; fixed costs = $246,400; quantity sold = 152,768 units; tax rate = 30 percent. How sensitive is OCF to changes in quantity sold? (Do not round your intermediate calculations.) $6.32 $0.20 $5.59 $4.90 $3.48

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!