Question: Consider a three-year project with the following information: initial fixed asset investment = $855,000; straight-line depreciation to zero over the five-year life; zero salvage value;
| Consider a three-year project with the following information: initial fixed asset investment = $855,000; straight-line depreciation to zero over the five-year life; zero salvage value; price = $33.45; variable costs = $22.25; fixed costs = $207,000; quantity sold = 93,000 units; tax rate = 40 percent. |
| Required: |
| What is the OCF at the base-case quantity sold? (Do not round intermediate calculations. Round your answer to the nearest whole number (e.g., 32).) |
| OCF | $ |
| What is the OCF at 94,000 units sold? (Do not round intermediate calculations. Round your answer to the nearest whole number (e.g., 32).) |
| OCF | $ |
| How sensitive is OCF to changes in quantity sold? (Do not round intermediate calculations. Round your answer as directed but do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |
| OCF/Q | $ |
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