Question: Continue using the information from the previous question: A project involves an initial capital spending of $450,000 and corresponding depreciation expense of $50,000 a year.

 Continue using the information from the previous question: A project involves

Continue using the information from the previous question: A project involves an initial capital spending of $450,000 and corresponding depreciation expense of $50,000 a year. The tax rate is 30%. These figures are not subject to change. In the base case estimation, the project can generate sales of 5,000 units of product selling at $120 per unit, with a unit variable cost of $90. The projects fixed cost is estimated to be $30,000 in the base case. Suppose the management team believes all of the estimates are accurate only to within +10%. In conducting the scenario analysis, the worst case scenario will yield an OCF of -$42,500 $89,100 O $20,250 $40,500

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