Homework Answers
We see that the Sensitivity of OCF to changes in quantity
sold=1*(30-12)*(1-21%)
=14.22
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Consider a project with a life of 8 years with the following information: ini investment $440,000,...
Consider a project with the following information: Initial fixed asset investment = $545,000; straight-line deprecia...
Consider a project with the following information: Initial fixed asset investment = $545,000; straight-line depreciation to zero over the 4-year life; zero salvage value; price = $53; variable costs = $34; fixed costs = $225,000; quantity sold = 114,000 units; tax rate = 22 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 = $705,000; straight-line depreciation...
Consider a three-year project with the following information: initial fixed asset investment = $705,000; straight-line depreciation to zero over the 5-year life; zero salvage value; price = $39.31; variable costs = $28.25; fixed costs = $329,000; quantity sold = 86,000 units; tax rate = 23 percent. a. What is the OCF at the base-case quantity sold? OCF= b. What is the OCF at 87,000 units sold? OCF= c. How sensitive is OCF to changes in quantity sold?
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 project with the following information: Initial fixed asset investment = $495,000; straight-line depreciation to...
Consider a project with the following information: Initial fixed asset investment = $495,000; straight-line depreciation to zero over the 4-year life; zero salvage value; price = $43; variable costs = $26; fixed costs = $195,000; quantity sold = 94,000 units; tax rate = 22 percent. How sensitive is OCF to changes in quantity sold?
Scenario Analysis Consider a 4-year project with the following information. Initial investment = $420,000; straight-lin...
Scenario Analysis
Consider a 4-year project with the following information. Initial investment = $420,000; straight-line depreciation over the 4-year life No salvage value Quantity sold = 110,000 units Price per unit = $23 Tax rate = 34 percent Variable costs per unit = $19 Discount rate = 10 percent Fixed costs = $190,000 1. How sensitive is OCF to changes in quantity sold? ii. How sensitive is NPV to changes in quantity sold?
Question#2 - Consider a four-year project with the following information: initial fixed asset investment = $575,000;...
Question#2 - Consider a four-year project with the following information: initial fixed asset investment = $575,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $36; variable costs = $17; fixed costs = $175,000; quantity sold = 84,000 units; tax rate = 34%. How sensitive is OCF to changes in quantity sold? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) (Do not forget to include...
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 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 four-year project with the following information: initial fixed asset investment = $610,000; straight-line depreciation...
Consider a four-year project with the following information: initial fixed asset investment = $610,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $48; variable costs = $36; fixed costs = $285,000; quantity sold = 112,000 units; tax rate = 25 percent. How sensitive is OCF to changes in quantity sold?
Consider a four-year project with the following information: initial fixed asset investment = $375,000; straight-line depreciation...
Consider a four-year project with the following information: initial fixed asset investment = $375,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $56; variable costs = $23; fixed costs = $195,000; quantity sold = 84,000 units; tax rate = 34%. How sensitive is OCF to changes in quantity sold? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) (Do not forget to include + or...
Scenario Analysis
Consider a 4-year project with the following information. Initial investment = $420,000; straight-line depreciation over the 4-year life No salvage value Quantity sold = 110,000 units Price per unit = $23 Tax rate = 34 percent Variable costs per unit = $19 Discount rate = 10 percent Fixed costs = $190,000 1. How sensitive is OCF to changes in quantity sold? ii. How sensitive is NPV to changes in quantity sold?
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