How sensitive is the operating cash flow

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A 5-year project is expected to generate annual sales of 8,400 units at a price of $71 per unit and a variable cost of $42 per unit. The equipment necessary for the project will cost $277,000 and will be depreciated on a straight-line basis over the life of the project. Fixed costs are $165,000 per year and the tax rate is 35 percent. How sensitive is the operating cash flow to a $1 change in the per unit sales price?

Reference no: EM132016817

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