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

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 5P

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