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Consider a three-year project with the following information: initial fixed asset investment = $865,000; straight-line depreciation to zero over the five-year life; zero salvage value; price = $33.85; variable costs = $22.45; fixed costs = $209,000; quantity sold = 95,000 units; tax rate = 40 percent.
Required:
What is the OCF at the base-case quantity sold? (Do not round intermediate calculations. Round your answer to the nearest whole number (e.g., 32).) OCF $
What is the OCF at 96,000 units sold? (Do not round intermediate calculations. Round your answer to the nearest whole number (e.g., 32).) OCF $
How sensitive is OCF to changes in quantity sold? (Do not round intermediate calculations. Round your answer as directed but do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) ΔOCF/ΔQ $
Find the effective interest rate per payment period for an interest rate of 6% compounded monthly for each of the given payment schedule.
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The process through which you built numerous situations in order to get the possible distribution of the NPVs is called:
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A share of stock is now selling for $120. It will pay a dividend of $10 per share at the end of the year. Its beta is 1. What do investors expect the stock to sell for at the end of the year? Assume the risk-free rate is 6% and the expected rate of r..
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