Question: Consider a three year project with the following information: initial fixed asset investment = $1,000,000; straight-line depreciation to zero over the four-year life; zero salvage

Consider a three year project with the following information: initial fixed asset investment = $1,000,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $50; variable costs = $30; fixed costs = $250,000;; quantity sold = 100,000 units; tax rate = 40 percent. How sensititive is operating cash flow to one dollar change in sales price?

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