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Sun Brite has a new pair of sunglasses it is evaluating. The company expects to sell 6 , 4 0 0 pairs of sunglasses at

Sun Brite has a new pair of sunglasses it is evaluating. The company expects to sell 6,400 pairs of sunglasses at a price of $159 each and a variable cost of $111 each. The equipment necessary for the project will cost $335,000 and will be depreciated on a straight-line basis over the 7-year life of the project. Fixed costs are $250,000 per year and the tax rate is 25 percent. How sensitive is the operating cash flow to a $1 increase in variable costs per pairs of sunglasses?
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$5,333
$4,320
$4,320
$4,800
$4,800

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