Question: Consider a 3 year project with the following information: initial fixed asset investment = $625,000; straight line depreciation over a five year life; zero salvage

Consider a 3 year project with the following information: initial fixed asset investment = $625,000; straight line depreciation over a five year life; zero salvage value; price = $29; variable costs = $18; fixed costs = $185,000; quantity sold = 100,000 units; tax rate = 34%. How sensitive is the OCF to changes in quantity sold?

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