Consider a three-year project with the following information: Initial fixed asset Investment = $670,000; straight-line depreciation to zero over the 4-year life; zero salvage value; price = $38.75; variable costs = $27.83; fixed costs = $308,000; quantity sold = 79,000 units; tax rate = 21 percent. How sensitive is OCF to changes in quantity sold? Note: 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 = $670,000; straight-line depreciation to zero over the 4-year life; zero salvage value; price = $38.75; variable costs = $27.83; fixed costs = $308,000; quantity sold = 79,000 units; tax rate = 21 percent. How sensitive is OCF to changes in quantity sold? Note: 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
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Transcribed Image Text:Consider a three-year project with the following information: Initial fixed asset Investment = $670,000; straight-line depreciation to zero
over the 4-year life; zero salvage value; price = $38.75; variable costs = $27.83; fixed costs $308,000; quantity sold = 79,000 units;
tax rate = 21 percent. How sensitive Is OCF to changes in quantity sold?
Note: Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
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