Question: Consider a project with the following information: initial fixed asset investment $400,000; straight-line depreciation to zero over the five-year life; zero salvage value; price =

Consider a project with the following information: initial fixed asset investment $400,000; straight-line depreciation to zero over the five-year life; zero salvage value; price = $40; variable costs = $22; fixed costs = $20,000; quantity sold = 10,000 units; tax rate 32 percent. How sensitive is OCF to a $1 sales price increase? (change in OCF / change in price) ($10,000) $6,800 $80,000 $10,000 $18

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