Question: P11-17 Sensitivity Analysis (LO1) Consider a project with a life of 5 years with the following information: initial fixed asset investment = $410,000; straight-line depreciation
P11-17 Sensitivity Analysis (LO1) Consider a project with a life of 5 years with the following information: initial fixed asset investment = $410,000; straight-line depreciation to zero over the 5-year life; zero salvage value; price = $25; variable costs = $13; fixed costs = $196,800; quantity sold = 123,984 units; tax rate = 21 percent. How sensitive is OCF to changes in quantity sold? Calculate OCF with data given, and also for an arbitrary quantity, say 1000 units more Sensitivity is (OCF2 - OCFIV/02 - 01). This is OCF per unit change in Q). Multiple Choice $12.23 $9.48 $10.81 $0.11 $6.73
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