Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider a three-year project with the following information: initial fixed asset investment = $875,000; 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 = $875,000; straight-line depreciation to zero over the five-year life; zero salvage value; price = $34.25; variable costs = $22.65; fixed costs = $211,000; quantity sold = 97,000 units; tax rate = 40 percent.

Required:

How sensitive is OCF to changes in quantity sold? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

OCF/Q $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance Markets Investments And Financial Management

Authors: Daisy Scott

1st Edition

1639892001, 9781639892006

More Books

Students also viewed these Finance questions