1. Consider a 10-year project with the following information: initial fixed asset investment = $347,000; straight-line depreciation to zero over the 10-year life; zero salvage value; price = $38; variable costs = $24; fixed costs = $127,000; quantity sold = 100,196 units; tax rate = 34%.

What is the percentage sensitivity of OCF to a change in variable cost per unit?

2. Consider a 10-year project with the following information: initial fixed asset investment = $347,000; straight-line depreciation to zero over the 10-year life; zero salvage value; price = $39; variable costs = $20; fixed costs = $120,000; quantity sold = 103,717 units; tax rate = 34%.

What is the dollar sensitivity of OCF to a change in quantity sold?