A 9-year project is expected to generate annual sales of 9,100 units at a price of $78 per unit and a variable cost of $49 per unit. The equipment necessary for the project will cost $333,000 and will be depreciated on a straight-line basis over the life of the project. Fixed costs are $200,000 per year and the tax rate is 40 percent. How sensitive is the operating cash flow to a $1 change in the per unit sales price? Multiple Choice $5,460 $3,403 $4,914 $4,159 $3,781
A 9-year project is expected to generate annual sales of 9,100 units at a price of $78 per unit and a variable cost of $49 per unit. The equipment necessary for the project will cost $333,000 and will be depreciated on a straight-line basis over the life of the project. Fixed costs are $200,000 per year and the tax rate is 40 percent. How sensitive is the operating cash flow to a $1 change in the per unit sales price? Multiple Choice $5,460 $3,403 $4,914 $4,159 $3,781
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A 9-year project is expected to generate annual sales of 9,100 units at a price of $78 per unit and a variable cost of $49 per unit. The equipment necessary for the project will cost $333,000 and will be depreciated on a straight-line basis over the life of the project. Fixed costs are $200,000 per year and the tax rate is 40 percent. How sensitive is the operating cash flow to a $1 change in the per unit sales price?
Multiple Choice
-
$5,460
-
$3,403
-
$4,914
-
$4,159
-
$3,781
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