Question: Consider a five-year project with the following information: initial fixed asset investment = $510,000; 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 = $510,000; straight-line depreciation to zero over the five-year life; zero salvage value; price = $34.50/unit; variable costs = $14.30/unit; fixed costs = $210,000 per year; quantity sold = 100,000 units per year; tax rate = 25%. How sensitive is OCF to changes in quantity sold (i.e., how much does OCF change given an increase of one unit sold in a year)?

		$16.75
		$13.85
		$14.55
		$12.75
		$15.15

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