Question: Consider a 4-year project with the following information. Initial fixed asset investment = $685,000. Straight-line depreciation to zero over the 4-year life; zero salvage value.

investment = $685,000. Straight-line depreciation to zero over the 4-year life; zero

Consider a 4-year project with the following information. Initial fixed asset investment = $685,000. Straight-line depreciation to zero over the 4-year life; zero salvage value. The tax rate = 24%. If the Operating Cash Flow (OCF) = $484,454 with units of 82,000 sold, and the Operating Cash Flow (OCF) = $492,798 with units of 83,000 sold a. How sensitive is OCF to changes in units sold? (Express as a positive number) (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 12.34.) a. Sensitivity of OCF to units sold b. What is the formula used to calculate the sensitivy of OCF in a.? (Enter the formula used to calcuate the sensitivity from the formula sheet) b. Formula used to calculate sensitivity in a. 1) OCF = EBIT + D-T 2)NSCF - SV-C5V-BVX7) 3DSENSITVITY VARIABLE - ANAV A VARIABLE 4) CFFA- OCT-NCS-ANWC 5) 0FC-PROFIT (1-T)+( 6) STRAIGHT-UNE - BV YEARS 7) SENSITVITY VARIABLE =A OCF 4 VARIABLE

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