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Vision Company is considering a five-year project with the following information: initial fixed asset investment = $738,000; straight-line depreciation to zero over the eight-year life;
Vision Company is considering a five-year project with the following information: initial fixed asset investment = $738,000; straight-line depreciation to zero over the eight-year life; zero salvage value; price = $35.60/unit; variable costs = $12.30/unit; fixed costs = $256,000 per year; quantity sold = 10,000 units per year; tax rate = 25%. How sensitive is OCF to changes in quantity sold (i.e., what is the change in OCF given an increase of one unit sold in a year)?
$17.22
$17.48
$17.64
$17.86
$18.02
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