Consider a four-year project with the following information: initial fixed asset investment = $480,000; straight-line depreciati
on to zero over the four-year life; zero salvage value; price = $32; variable costs = $22; fixed costs = $170,000; quantity sold = 78,000 units; tax rate = 32 percent. How sensitive is OCF to changes in quantity sold? (Round your answer to 2 decimal places. (e.g., 32.16)) ΔOCF/ΔQ $
1 answer:
Answer:
Explanation:
This is a question under Sensitivity analysis <u><em>(which is a technique for forecasting the result of a decision if a condition turns out to be different compared to the key forecasts. It assists in evaluating the risk level of a strategy. It is also used in identifying how reliant the output is on a specific input value.)</em></u> and the diagram explaning the step by step solution can be seen in the attached image below.
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well, he has room for a total of 264 vehicles, he needs to have "five times as many cars as trucks", namely the cars : trucks ratio must be 5 to 1 or 5:1.
well, to change the total value to a ratio, we simply divide the total amount by the sum of the ratios, namely 264 ÷ (5+1), and distribute accordingly.