Question: Question 5 2 pts We are evaluating a project that costs $839,364, has an eight-year life, and has no salvage value. Assume that depreciation is
Question 5 2 pts We are evaluating a project that costs $839,364, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 61,686 units per year. Price per unit is $37, variable cost per unit is $19, and fixed costs are $416.245 per year. The tax rate is 35%, and we require a return of 18% on this project. In percentage terms, what is the sensitivity of OCF to changes in the variable cost per unit projection? (Round answer to 2 decimal places. Do not round intermediate calculations)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
