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A company is considering a five-year project with the following information: initial fixed asset investment = $582,000; straight-line depreciation to zero over the six-year life;
A company is considering a five-year project with the following information: initial fixed asset investment = $582,000; straight-line depreciation to zero over the six-year life; zero salvage value; price = $41.65/unit; variable costs = $17.12/unit; fixed costs = $238,000 per year; quantity sold = 100,000 units per year; tax rate = 25%. How sensitive is OCF to changes in quantity sold (i.e., what is the change in OCF given an increase of one unit sold in a year)? $18.10 $18.70 $18.55 $18.25 $18.40
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