Question
Consider a three-year project with the following information: initial fixed asset investment = $870,000; straight-line depreciation to zero over the five-year life; zero salvage value;
Consider a three-year project with the following information: initial fixed asset investment = $870,000; straight-line depreciation to zero over the five-year life; zero salvage value; price = $34.05; variable costs = $22.55; fixed costs = $210,000; quantity sold = 96,000 units; tax rate = 34 percent.
Required: |
What is the OCF at the base-case quantity sold? (Do not round intermediate calculations. Round your answer to the nearest whole number (e.g., 32).) |
OCF | $ |
What is the OCF at 97,000 units sold? (Do not round intermediate calculations. Round your answer to the nearest whole number (e.g., 32).) |
OCF | $ |
How sensitive is OCF to changes in quantity sold? (Do not round intermediate calculations. Round your answer as directed but do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |
OCF/Q | $ |
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