Question: Consider a project with the following information: Initial fixed asset investment = $530,000; straight-line depreciation to zero over the 4-year life; zero salvage value; price

Consider a project with the following information: Initial fixed asset investment = $530,000; straight-line depreciation to zero over the 4-year life; zero salvage value; price = $50; variable costs = $31; fixed costs = $216,000; quantity sold = 108,000 units; tax rate = 24 percent.

How sensitive is OCF to changes in quantity sold?

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