What is the ocf per year

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Question - A project requires an investment of $100,000 in equipment that has a five-year life. The equipment has no salvage value at the end of five years and will be depreciated on a straight-line basis. The required return is 15% and the tax rate is 34%. Assuming unit sales are 2,200 units, selling price is $60 per unit, variable costs are $21 per unit and fixed costs are $9,500, what is the OCF per year?

a. $76,300

b. $85,820

c. $65,426

d. $57,158

e. $50,358

Reference no: EM133078244

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