You Are Analyzing a Project and Have Developed the Following

question 50

Multiple Choice

You are analyzing a project and have developed the following estimates: unit sales = 1,320, price per unit = $79, variable cost per unit = $43, fixed costs = $24,900. The depreciation is $11,300 a year and the tax rate is 35 percent. What effect would an increase of $1 in the selling price have on the operating cash flow?

• A) $858
• B) $1,141
• C) $1,320
• D) $1,406
• E) $1,433

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Definitions:

Negotiable

Relates to legal instruments, such as checks or bills of lading, that can be transferred from one party to another, changing ownership by endorsement.

Particular Fund

A specific investment fund targeted toward certain assets or investment strategies.

Law of Negotiable Instruments

A branch of law that deals with the rights and duties of parties to documents like checks, bills of exchange, and promissory notes.

Assignable

Capable of being transferred or made over to someone else, typically referring to rights or property.