Magellen Industries is analyzing a new project. The data they have gathered to date is as follows:
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Magellen Industries is analyzing a new project. The data they have gathered to date is as follows:
| Lower Bound | Expected Value | Upper Bound | |
| Sales quantity | 9500 | 10000 | 10500 |
| Sales price per unit | $9.75 | $10.00 | $10.25 |
| Variable cost per unit | $4.80 | $5.20 | $5.60 |
| Fixed cost | $15,000.00 | $18,000.00 | $21,000.00 |
Initial requirement for equipment: $120,000
Depreciation: Straight-line to zero over the four-year life of the project with no salvage value.
Required rate of return: 15%
Marginal tax rate: 35%
What is the operating cash flow under the base-case scenario?
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