Question: 3. Consider a three-year project with the following information: initial fixed asset investment = $698,000; straight-line depreciation to zero over the four-year life; zero salvage

3. Consider a three-year project with the following information: initial fixed asset investment = $698,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $34.15; variable costs = $22.60; fixed costs = $210,500; quantity sold = 96,500 units; tax rate = 40 percent. Required: What is the OCF at the base-case quantity sold? OCF What is the OCF at 97,500 units sold? OCF $ How sensitive is OCF to changes in quantity sold? AOCF/AQ $

3. Consider a three-year project with the following information: initial fixed asset investment =$698,000; straight-line depreciation to zero over the four-year life; zero salvage value; price =$34.15; variable costs =$22.60; fixed costs =$210,500; quantity sold =96,500 units; tax rate =40 percent. Required: What is the OCF at the base-case quantity sold? What is the OCF at 97,500 units sold? How sensitive is OCF to changes in quantity sold

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