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Consider a five-year project with the following information: initial fixed asset investment =$470,000; straight-line depreciation to zero over the five-year life; zero salvage value; unit
Consider a five-year project with the following information: initial fixed asset investment =$470,000; straight-line depreciation to zero over the five-year life; zero salvage value; unit price =$41; unit variable cost =$21; fixed costs =$350,000; quantity sold =30,000 units; tax rate =25%. How sensitive is OCF to changes in quantity sold (i.e., the change in OCF given one unit increase in quantity)? $14.50$15.00$15.50$16.00$16.50
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