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Consider a 6-year project with the following information: initial fixed asset investment = $460,000; straight-line depreciation to zero over the 6-year life; salvage value =
Consider a 6-year project with the following information: initial fixed asset investment = $460,000; straight-line depreciation to zero over the 6-year life; salvage value = $90,000; initial NWC = $120,000, will be recouped at the end of the project; price = $34; variable costs = $19; fixed costs = $188,600; quantity sold = 90,528 units; tax rate = 21 percent. What is the sensitivity of OCF to sales volume?
14.17
12.13
11.85
8.75
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