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Consider a three-year project with the following information: initial fixed asset investment = $375,000; straight-line depreciation to zero over the three-year life; zero salvage value;

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Consider a three-year project with the following information: initial fixed asset investment = $375,000; straight-line depreciation to zero over the three-year life; zero salvage value; price = $28.20; unit variable cost = $13.50; fixed costs = $300,000; 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)? $11.48 $11.25 $11.02 $10.77 $10.54 QUESTION 5 A company has just purchased a $640,000 machine to produce gadgets. The machine will be fully depreciated by the straight-line method over its eight-year economic life. The variable cost per gadget is $11.9, and the company incurs fixed costs of $300,000 each year . The company anticipates to sell 20,000 gadgets each year during the project life of eight years. The corporate tax rate for the company is 25%. The appropriate discount rate is 10%. What is the financial break-even unit price of the project (i.e., the price per gadget for the project to break even financially)

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