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ABC) Consider a 4 year project with the following information: Initial fixed asset investment = $475,000; straight line depreciation to zero over the 4-year life;
ABC) Consider a 4 year project with the following information:
Initial fixed asset investment = $475,000;
straight line depreciation to zero over the 4-year life;
zero salvage value;
price = $26; variable costs = $18;
fixed costs = $195,000
Quantity sold = 84,000 units
Tax rate = 34%
How sensitive is OCF to changes in quantity sold?
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