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

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

Consider a four-year project with the following information: initial fixed asset investment = dollar 440,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = dollar 25; variable costs = dollar 15; fixed costs = dollar 130,000; quantity sold = 73,000 units: tax rate = 35 percent. How sensitive is OCF to changes in quantity sold? (Do not round intermediate calculations and round your answer to 2 decimal places (e.g.,32.16).) delta OCF/delta

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!