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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 = $27; variable costs = $12; fixed costs = $212,800; quantity sold = 87,248 units; tax rate = 24 percent. How sensitive is OCF to changes in quantity sold?
a. 8.09
b. 11.40
c. 0.09
d. 14.71
e. 13.00
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