= Consider a three-year project with the following information: initial fixed asset investment = $665,000; straight-line depreciation to zero over the five-year life; zero salvage value; price $39.20; variable costs = $29.85; fixed costs = $315,000; quantity sold = 85,000 units; tax rate = 23 percent. How sensitive is OCF to changes in quantity sold? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) AOCF/AQ
= Consider a three-year project with the following information: initial fixed asset investment = $665,000; straight-line depreciation to zero over the five-year life; zero salvage value; price $39.20; variable costs = $29.85; fixed costs = $315,000; quantity sold = 85,000 units; tax rate = 23 percent. How sensitive is OCF to changes in quantity sold? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) AOCF/AQ
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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Vijay
Transcribed Image Text:=
Consider a three-year project with the following information: initial fixed asset investment
= $665,000; straight-line depreciation to zero over the five-year life; zero salvage value;
price $39.20; variable costs = $29.85; fixed costs = $315,000; quantity sold = 85,000
units; tax rate = 23 percent. How sensitive is OCF to changes in quantity sold? (Do not
round intermediate calculations and round your answer to 2 decimal places, e.g.,
32.16.)
AOCF/AQ
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