Question: Consider a five-year project with the following information: initial fixed asset investment = $550,000; straight-line depreciation to zero over the five-year life; zero salvage value;

Consider a five-year project with the following information: initial fixed asset investment = $550,000; straight-line depreciation to zero over the five-year life; zero salvage value; price = $29; variable costs = $16; fixed costs = $290,000; quantity sold = 68,000 units; tax rate = 25%. How sensitive is OCF to changes in quantity sold (i.e., the change in OCF given one unit increase in quantity)?

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