Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Consider a four-year project with the following information: initial fixed asset investment = $490,000; straight-line depreciation to zero over the four-year life; zero salvage value;

Consider a four-year project with the following information: initial fixed asset investment = $490,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $41; variable costs = $32; fixed costs = $210,000; quantity sold = 99,000 units; tax rate = 34%.

How sensitive is OCF to changes in quantity sold?

(Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.)

OCF/Q $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Microeconomics An Intuitive Approach with Calculus

Authors: Thomas Nechyba

1st edition

538453257, 978-0538453257

Students also viewed these Finance questions