Question: We are evaluating a project that costs 2 , 0 0 0 , 0 0 0 0 , has a 5 - year life, and
We are evaluating a project that costs has a year life, and has no salvage value. Assume that depreciation is straightline to zero over the life of the project.Sales are projected at units per year. The price per unit is $ the variable cost per unit is $ and fixed costs are$ per year. The tax rate is percent, and we require a return of percent on this project.What is the sensitivity of OCF to changes in the variable cost figure?
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
