Consider a Three-Year Project with the Following Information: Initial Fixed

Consider a three-year project with the following information: initial fixed asset investment = $347,600; straight-line depreciation to zero over the three-year life; zero salvage value; price per unit = $49.99; variable costs per unit = $30.82; fixed costs per year = $187,000; quantity sold per year = 65,500 units; tax rate = 35 percent.How sensitive is OCF to an increase of one unit in the quantity sold?

A) $12.46
B) $11.67
C) $8.67
D) $9.08
E) $13.40

Correct Answer:

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