Sensitivity of the ocf to changes in quantity sold

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Reference no: EM131540880

Consider a four-year project with the following information: initial fixed asset investment = $504943; straight-line depreciation to zero over the four-year life; zero salvage value; price = $35; variable costs = $24; fixed costs = $186297; quantity sold = 79279 units; tax rate = 37 percent. Calculate the sensitivity of the OCF to changes in the quantity sold. [Hint: Think of this as, "How much does OCF change if we can sell one more unit each year?"] (Do not round intermediate calculations and round your final answer to 2 decimal places. Omit the "$" sign and commas in your response. For example, $1.2345 should be entered as 1.23.)

Reference no: EM131540880

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