What is the OCF at the base-case quantity sold?

[jbrown]

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.

i. What is the OCF at the base-case quantity sold?

ii. What is the OCF at 97,000 units sold?

iii. How sensitive is OCF to changes in quantity sold?

 

[mmm4444bot]

Hi Brown:

Did you take time to read the forum guidelines, yet? Again, here's a link to the summary page.

Ciao