How sensitive is ocf to changes in quantity sold

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Consider a three-year project with the following information: initial fixed asset investment = $845,000; straight-line depreciation to zero over the five-year life; zero salvage value; price = $33.05; variable costs = $22.05; fixed costs = $205,000; quantity sold = 91,000 units; tax rate = 40 percent.

What is the OCF at the base-case quantity sold? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

OCF            $

What is the OCF at 92,000 units sold? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

OCF            $

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.)

ΔOCF/ΔQ            $

Reference no: EM131578593

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