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Consider a three-year project with the following information: Initial fixed asset investment = $725,000; straight-line depreciation to zero over the 5-year life; zero salvage value;
Consider a three-year project with the following information: Initial fixed asset investment = $725,000; straight-line depreciation to zero over the 5-year life; zero salvage value; price = $39.63; variable costs = $28.49; fixed costs = $341,000; quantity sold = 90,000 units; tax rate = 22 percent. How sensitive is OCF to changes in quantity sold?...
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