Question: Consider a three-year project with the following information: initial fixed asset investment = $674,000; straight-line depreciation to zero over the four-year life; zero salvage value;

Consider a three-year project with the following information: initial fixed asset investment = $674,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $32.95; variable costs = $22.00; fixed costs = $204,500; quantity sold = 90,500 units; tax rate = 40 percent.

What is the OCF at the base-case quantity sold?

What is the OCF at 91,500 units sold?

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