Question
Zappos' 6-year sneaker project requires an initial investment of $390,000 in fixed assets. The fixed assets will be depreciated straight-line to zero over the project's
Zappos' 6-year sneaker project requires an initial investment of $390,000 in fixed assets. The fixed assets will be depreciated straight-line to zero over the project's life. Details for the sneaker project are:
Price: $27 per unit
Variable costs: $15 per unit
Fixed costs: $195,000 per year
Quantity sold: 117,000 units
Tax rate: 24%
Determine the sensitivity of OCF to changes in quantity sold
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
14th edition
133879879, 978-0133879872
