Question
Consider a three-year project with the following information: initial fixed asset investment = $682,000; straight-line depreciation to zero over the four-year life; zero salvage value;
Consider a three-year project with the following information: initial fixed asset investment = $682,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $33.35; variable costs = $22.20; fixed costs = $206,500; quantity sold = 92,500 units; tax rate = 40 percent. |
Required: |
What is the OCF at the base-case quantity sold? (Do not round intermediate calculations. Round your answer to the nearest whole number (e.g., 32).) |
OCF | $ |
What is the OCF at 93,500 units sold? (Do not round intermediate calculations. 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. Round your answer as directed but do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |
?OCF/?Q | $ |
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