Question: Consider a three-year project with the following information: initial fixed asset investment = $730,000; straight-line depreciation to zero over the five-year life; zero salvage value

Consider a three-year project with the following information: initial fixed asset investment = $730,000; straight-line depreciation to zero over the five-year life; zero salvage value; price = $40.30; variable costs = $32.80; fixed costs = $345,000; quantity sold = 90,000 units; tax rate = 34 percent. How sensitive is OCF to changes in quantity sold?

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