*Consider a four-year project with the following information: Initial fixed asset investment $625,000; straight-line depreciation to...

 

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*Consider a four-year project with the following information: Initial fixed asset investment $625,000; straight-line depreciation to zero over the 4-year life; zero salvage value, price per unit = $32; variable cost per unit = $24; fixed costs = $395,000; quantity sold = 68,500 units; tax rate = 21 percent. Using the Tax-Shield Approach, what is the Operating Cash Flow (OCF) Sensitivity Factor to changes in quantity sold? *Consider a four-year project with the following information: Initial fixed asset investment $625,000; straight-line depreciation to zero over the 4-year life; zero salvage value, price per unit = $32; variable cost per unit = $24; fixed costs = $395,000; quantity sold = 68,500 units; tax rate = 21 percent. Using the Tax-Shield Approach, what is the Operating Cash Flow (OCF) Sensitivity Factor to changes in quantity sold?

Answer rating: 100% (QA)

The OCF Sensitivity Factor is a measure of how sensitive the OCF is to changes in quant... View the full answer