Question: Consider a project with the following information: Initial fixed asset investment = $495,000; 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 = $495,000; straight-line depreciation to zero over the 4-year life; zero salvage value; price = $43; variable costs = $26; fixed costs = $195,000; quantity sold = 94,000 units; tax rate = 22 percent.

How sensitive is OCF to changes in quantity sold?

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