Consider a four-year project with the following information: initial fixed asset investment = $600,000; straight-line depreciation to...

70.2K

Verified Solution

Question

Finance

Consider a four-year project with the following information:initial fixed asset investment = $600,000; straight-linedepreciation to zero over the four-year life; zero salvage value;price = $46; variable costs = $36; fixed costs = $275,000; quantitysold = 106,000 units; tax rate = 23 percent.

How sensitive is OCF to changes in quantity sold? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)

Answer & Explanation Solved by verified expert
3.6 Ratings (444 Votes)
    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Consider a four-year project with the following information:initial fixed asset investment = $600,000; straight-linedepreciation to zero over the four-year life; zero salvage value;price = $46; variable costs = $36; fixed costs = $275,000; quantitysold = 106,000 units; tax rate = 23 percent.How sensitive is OCF to changes in quantity sold? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)

Other questions asked by students