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Consider a project with a life of 7 years with the following information: initial fixed asset investment = $380,000; straight-line depreciation to zero over the
Consider a project with a life of 7 years with the following information: initial fixed asset investment = $380,000; straight-line depreciation to zero over the 7-year life; zero salvage value; price = $30; variable costs = $13; fixed costs = $216,600; quantity sold = 140,790 units; tax rate = 22 percent. How sensitive is OCF to changes in quantity sold? [Calculate OCF with data given, and also for an arbitrary quantity, say 1000 units more. Sensitivity is (OCF2-OCF1)/(Q2 -Q1). This is OCF per unit change in QJ Multiple Choice $13.26 $0.08 $9.41 $15.12 $17.11
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