Question
Consider a three-year project with the following information: initial fixed asset investment = $845,000; 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 = $845,000; straight-line depreciation to zero over the five-year life; zero salvage value; price = $33.05; variable costs = $22.05; fixed costs = $205,000; quantity sold = 91,000 units; tax rate = 40 percent. How sensitive is OCF to changes in quantity sold?
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Personal Financial Planning
Authors: Lawrence J. Gitman, Michael D. Joehnk, Randy Billingsley
12th Edition
1439044473, 978-1439044476
