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Face Mask Inc. is evaluating a new 6-year project. Estimated annual sales are 10,100 units at a price of $88 per unit and a variable
Face Mask Inc. is evaluating a new 6-year project. Estimated annual sales are 10,100 units at a price of $88 per unit and a variable cost of $59 per unit. The fixed assets needed for the project cost $413,000 and will be depreciated on a straight-line basis over the life of the project. Fixed costs are $250,000 per year and the tax rate is 34 percent. How sensitive is the operating cash flow to a $1 change in the per unit sales price? (Hint: Find OCF/Price)
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