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. 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.) OCF $ What is the OCF at 92,000 units sold? (Do not round intermediate calculations and 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 and 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
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started