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QUESTION Consider a five-year project with the following information: initial fixed asset investment $580,000; straight-line depreciation to zero over the five-year life; zero salvage
QUESTION Consider a five-year project with the following information: initial fixed asset investment $580,000; straight-line depreciation to zero over the five-year life; zero salvage value; price $49.50/unit; variable costs $16.80/unit; fixed costs $250,000 per year, quantity sold 100,000 units per year; tax rate 25%. How sensitive is OCF to changes in quantity sold (.e. how much does OCF change given an increase of one unit sold in a year)? $24.53 $37.12 10 points $36.61 $38.38 $36.25
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