Sun Brite has a new pair of sunglasses it is evaluating. The company expects to sell 7,300 pairs of sunglasses at a price of $168 each and a variable cost of $120 each. The equipment necessary for the project will cost $380,000 and will be depreciated on a straight-line basis over the 9-year life of the project. Fixed costs are $340,000 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?

Multiple Choice

$6,164

$4,993

$4,993

$5,548

$5,548