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Sun Brite has a new pair of sunglasses it is evaluating. The company expects to sell 5 , 7 0 0 pairs of sunglasses at

Sun Brite has a new pair of sunglasses it is evaluating. The company expects to sell 5,700 pairs of sunglasses at a price of $152 each and a variable cost of $104 each. The equipment necessary for the project will cost $300,000 and will be depreciated on a straight-line basis over the 9-year life of the project. Fixed costs are $180,000 per year and the tax rate is 21 percent. How sensitive is the operating cash flow to a $1 increase in variable costs per pairs of sunglasses?
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$4,117
$3,335
$4,503
$3,705
$3,335

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