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A company is analyzing a proposed 3 - year project using standard sensitivity analysis. The company expects to sell 1 2 , 0 0 0
A company is analyzing a proposed year project using standard sensitivity analysis. The company expects to sell units, pm percent. The expected variable cost per unit is $ and the expected fixed costs are $ The fixed and variable cost estimates are considered accurate within a pm percent range. The sales price is estimated at $ a unit, pm percent. The project requires an initial investment of $ for equipment that will be depreciated using the straightline method to zero over the project's life. The equipment can be sold for $ at the end of the project. The project requires $ in net working capital for the three years. The discount rate is percent and tax rate is percent. What is the operating cash flow for year under the optimistic case scenario? Hint: under the optimistic scenario, the number of units sold and price are higher and the costs are lower than expected
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