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MC Question 3
The following financial information relates to an investment project:
| $000 | |
|---|---|
| Present value of sales revenue | 50,025 |
| Present value of variable costs | 25,475 |
| Present value of contribution | 24,550 |
| Present value of fixed costs | 18,250 |
| Present value of operating income | 6,300 |
| Initial investment | 5,000 |
| Net present value | 1,300 |
What is the sensitivity of the net present value of the investment project to a change in sales volume?
A. 7·1%
B. 2·6%
C. 5·1%
D. 5·3%