Changes in the variable cost per unit projection

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Reference no: EM131986160

We are evaluating a project that costs $841644, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 58157 units per year. Price per unit is $37, variable cost per unit is $20, and fixed costs are $416845 per year. The tax rate is 35%, and we require a return of 21% on this project. In dollar terms, what is the sensitivity of OCF to changes in the variable cost per unit projection?

Reference no: EM131986160

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