How sensitive is the operating cash flow

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Reference no: EM132016851

A 9-year project is expected to generate annual sales of 9,100 units at a price of $78 per unit and a variable cost of $49 per unit. The equipment necessary for the project will cost $333,000 and will be depreciated on a straight-line basis over the life of the project. Fixed costs are $200,000 per year and the tax rate is 40 percent. How sensitive is the operating cash flow to a $1 change in the per unit sales price?

Reference no: EM132016851

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