Consider a three-year project with the following information: Initial fixed asset Investment = $670,000; straight-line depreciation to zero over the 4-year life; zero salvage value; price = $38.75; variable costs = $27.83; fixed costs = $308,000; quantity sold = 79,000 units; tax rate = 21 percent. How sensitive is OCF to changes in quantity sold? Note: Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. AOCF+AQ

Consider a three-year project with the following information: Initial fixed asset Investment = $670,000; straight-line depreciation to zero over the 4-year life; zero salvage value; price = $38.75; variable costs = $27.83; fixed costs = $308,000; quantity sold = 79,000 units; tax rate = 21 percent. How sensitive is OCF to changes in quantity sold? Note: Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. AOCF+AQ

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 10E: Roberts Company is considering an investment in equipment that is capable of producing more...

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