A 7-year project is expected to generate annual sales of 10,400 units at a price of...

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Finance

A 7-year project is expected to generate annual sales of 10,400units at a price of $91 per unit and a variable cost of $62 perunit. The equipment necessary for the project will cost $437,000and will be depreciated on a straight-line basis over the life ofthe project. Fixed costs are $265,000 per year and the tax rate is35 percent. How sensitive is the operating cash flow to a $1 changein the per unit sales price?

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A 7-year project is expected to generate annual sales of 10,400units at a price of $91 per unit and a variable cost of $62 perunit. The equipment necessary for the project will cost $437,000and will be depreciated on a straight-line basis over the life ofthe project. Fixed costs are $265,000 per year and the tax rate is35 percent. How sensitive is the operating cash flow to a $1 changein the per unit sales price?

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