Question
A project has a seven-year life and an initial investment of $228.700 in equipment. The equipment will be depreciated straight-line to zero over seven
A project has a seven-year life and an initial investment of $228.700 in equipment. The equipment will be depreciated straight-line to zero over seven years. Fixed costs are $124,600. Variable costs are $8.16 per unit. Sales are estimated at 54,500 units at an average price of $11.99. The estimated ranges of each variable are: sales quantity 15%; sales price 2%; variable cost 10%; and fixed costs 4%. The tax rate is 35%. Under the worst-case scenario, what is the operating cash flow?
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
12th edition
978-0324597714, 324597711, 324597703, 978-8131518571, 8131518574, 978-0324597707
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