Consider a three-year project with the following information: initial fixed asset investment = $670,000; straight-line depreciation...
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? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Homework Answers
How sensitive is OCF to changes in quantity sold = $8.63 per unit
| No units sold | 79000 | 78000 |
| Sales | 3061250 | 3022500 |
| Variable cost | 2198570 | 2170740 |
| Contribution | 862680 | 851760 |
| Fixed costs | 308000 | 308000 |
| Depreciation | 167500 | 167500 |
| EBIT | 387180 | 376260 |
| Less: Tax(21%) | 81307.8 | 79014.6 |
| PAT | 305872.2 | 297245.4 |
| OCF [ EBIT + Depreciation - Taxes] | 473372.2 | 464745.4 |
|
Difference [473372.2-464745.4] |
8626.8 | |
| OCF
change per unit [ 8626.8/1000] |
8.63 |
Add Answer to:
Consider a three-year project with the following information:
initial fixed asset investment = $670,000; straight-line
depreciation...
Consider a three-year project with the following information: initial fixed asset investment = $670,000; straight-line depreciation...
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? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Consider a project with the following information: Initial fixed asset investment = $540,000; straight-line depreciation to...
Consider a project with the following information: Initial fixed asset investment = $540,000; straight-line depreciation to zero over the 4-year life; zero salvage value; price = $52; variable costs = $33; fixed costs = $222,000; quantity sold = 112,000 units; tax rate = 21 percent. How sensitive is OCF to changes in quantity sold? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Consider a three-year project with the following information: initial fixed asset investment = $680,000; straight-line depreciation...
Consider a three-year project with the following information: initial fixed asset investment = $680,000; straight-line depreciation to zero over the 4-year life; zero salvage value; price = $38.91; variable costs = $27.95; fixed costs = $314,000; quantity sold = 81,000 units; tax rate = 23 percent. How sensitive is OCF to changes in quantity sold? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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Consider a three-year project with the following information: initial fixed asset investment = $665,000; straight-line depreciation...
Consider a three-year project with the following information: initial fixed asset investment = $665,000; straight-line depreciation to zero over the five-year life; zero salvage value; price $39.2O; variable costs $29.85; fixed costs = units; tax rate 23 percent. How sensitive is OCF to changes in quantity sold? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) $315,000; quantity sold 85,000 ΔΟCF/ΔQ
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Consider a three-year project with the following information: initial fixed asset investment = $665,000; straight-line depreciation to zero over the five-year life; zero salvage value; price = $39.20; variable costs = $29.85; fixed costs = $315,000; quantity sold = 85,000 units; tax rate = 23 percent. How sensitive is OCF to changes in quantity sold? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) AOCFIAQ
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