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Sun Brite has a new pair of sunglasses it is evaluating. The company expects to sell 6 , 8 0 0 pairs of sunglasses at

Sun Brite has a new pair of sunglasses it is evaluating. The company expects to sell 6,800 pairs of sunglasses at a price of $163 each and a variable cost of $115 each. The equipment necessary for the project will cost $355,000 and will be depreciated on a straight-line basis over the 7-year life of the project. Fixed costs are $290,000 per year and the tax rate is 24 percent. How sensitive is the operating cash flow to a $1 increase in variable costs per pairs of sunglasses?

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