Question: Consider a five-year project with the following information: initial fixed asset investment = $470,000; 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 = $470,000; straight-line depreciation to zero over the five-year life; zero salvage value; unit price = $41; unit variable cost = $21; fixed costs = $350,000; quantity sold = 30,000 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)?

A. $14.50

B. $15.00

C. $15.50

D. $16.00

E. $16.50

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