Question: Consider a three-year project with the following information: initial fixed asset investment = $1,000,000; straight-line depreciation to zero over the four-year life; zero salvage value;
Consider a three-year project with the following information: initial fixed asset investment = $1,000,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $50; variable costs = $30; fixed costs = $250,000; quantity sold = 100,000 units; tax rate = 40 percent. How sensitive is operating cash flow to a one dollar change in sales price? $1,700,000 $60,000 $5,000,000 $250,000 $100,000
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