Question: Consider a four-year project with the following information: initial fixed asset investment = $420,000; straight-line depreciation to zero over the four-year life; zero salvage value

Consider a four-year project with the following information: initial fixed asset investment = $420,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $25; variable costs = $16; fixed costs = $180,000; quantity sold = 75,000 units; tax rate = 34 percent. How sensitive is OCF to changes in quantity sold?

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