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36.) The Company is considering a project with estimated annual unit sales of 180,000; price per unit of $36; variable costs per unit of $12;

36.)

The Company is considering a project with estimated annual unit sales of 180,000; price per unit of $36; variable costs per unit of $12; and fixed costs of $380,000. The firm expects that the true values for unit sales, price per unit, variable costs per unit, and fixed costs will be within plus or minus 20% of these estimates. The project requires a fixed asset investment of $2,000,000 that will be depreciated straight-line to zero over the projects 5 year life. The firms discount rate is 10% and the tax rate is 30%. Calculate the worst case OCF?

$1,252,320

$2,890,540

$1,340,325

$2,381,280

$1,736,160

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