Question: Consider a four-year project with the following information: Initial fixed asset investment = $480,000; straight-line depreciation to zero over the four-year life; zero salvage value;

Consider a four-year project with the following information: Initial fixed asset investment = $480,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $37; variable costs = $23; fixed costs = $195,000; quantity sold = 90,000 units; tax rate = 34 percent.

How sensitive is OCF to changes in quantity sold?

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