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A 7-year project is expected to generate annual sales of 8,600 units at a price of $73 per unit and a variable cost of $44
A 7-year project is expected to generate annual sales of 8,600 units at a price of $73 per unit and a variable cost of $44 per unit. The equipment necessary for the project will cost $293,000 and will be depreciated on a straight-line basis over the life of the project. Fixed costs are $175,000 per year and the tax rate is 34 percent. How sensitive is the operating cash flow to a $1 change in the per unit sales price?
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