Question: Consider a 5 year project with an initial fixed asset investment of $350,000, straight line depreciation to zero over the projects life, a zero salvage

Consider a 5 year project with an initial fixed asset investment of $350,000, straight line depreciation to zero over the projects life, a zero salvage value, a selling price of $29, variable cost of $21, fixed costs of $139,700, a sale quantity of 110,000 units and tax rate of 35 percent. What is the sensitivity of OCF to changes in quantity sold?

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