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A 9-year project is expected to generate annual sales of 9,100 units at a price of $78 per unit and a variable cost of $49
A 9-year project is expected to generate annual sales of 9,100 units at a price of $78 per unit and a variable cost of $49 per unit. The equipment necessary for the project will cost $333,000 and will be depreciated on a straight-line basis to $135,000 over the life of the project. Fixed costs are $200,000 per year and the tax rate is 40 percent. How sensitive is the operating cash flow to a one unit change of sales?
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