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Problem:

Consider a three-year project with the following information: initial fixed asset investment = $870,000; straight-line depreciation to zero over the five-year life; zero salvage value; price = $34.05; variable costs = $22.55; fixed costs = $210,000; quantity sold = 96,000 units; tax rate = 34 percent.

Required:

Question: How sensitive is OCF to changes in quantity sold?

Note: Show all workings.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91172596

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