Consider a four-year project with the following information: initial fixed asset investment = $570,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $40; variable costs = $27; fixed costs = $245,000; quantity sold = 88,000 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.)

OCF to changes in quantity sold is sensetive to $10.14

Explanation:

OFC = [(P - v)Q -FC](1 - T) + TD

        = [(40 - 27)(88000) - 245000](0.78) + 0.22*(570000/4)

        = $732,570

OFC when units are 88001

OFC = [(P - v)Q -FC](1 - T) + TD

        = [(40 - 27)(88001) - 245000](0.78) + 0.22*(570000/4)

        = $732,580.14

sensitive is OCF to changes in quantity sold = $10.14

Therefore, OCF to changes in quantity sold is sensetive to $10.14

i just took the test and it is financing

answer; marketing resource management;