Question: ABC) Consider a 4 year project with the following information: Initial fixed asset investment = $475,000; straight line depreciation to zero over the 4-year life;

ABC) Consider a 4 year project with the following information:

Initial fixed asset investment = $475,000;

straight line depreciation to zero over the 4-year life;

zero salvage value;

price = $26; variable costs = $18;

fixed costs = $195,000

Quantity sold = 84,000 units

Tax rate = 34%

How sensitive is OCF to changes in quantity sold?

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