Question
Consider a three-year project with the following information: initial fixed asset investment = $695,000; straight-line depreciation to zero over the 4-year life; zero salvage value;
Consider a three-year project with the following information: initial fixed asset investment = $695,000; straight-line depreciation to zero over the 4-year life; zero salvage value; price = $39.15; variable costs = $28.13; fixed costs = $323,000; quantity sold = 84,000 units; tax rate = 21 percent.
What is the OCF at the base-case quantity sold? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
What is the OCF at 85,000 units sold? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
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