9.1 9.2 Calculating Operating Cash Flow. Mater Pasta, Inc., has projected a sales volume of $1,432 for the second year of a proposed expansion project. Costs normally run 70 percent of sales, or about $1,002 in this case. The depreciation expense will be $80, and the tax rate is 34 percent. What is the operating cash flow? Scenario Analysis. A project under consideration costs $500,000, has a five- year life, and has no salvage value. Depreciation is straight-line to zero. The required return is 15 percent, and the tax rate is 34 percent. Sales are projected at 400 units per year. Price per unit is $3,000, variable cost per unit is $1,900, and fixed costs are $250,000 per year. No net working capital is required. Suppose you think the unit sales, price, variable cost, and fixed cost projections are accurate to within 5 percent. What are the upper and lower bounds for these projections? What is the base-case NPV? What are the best- and worst-case scenario NPVs