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Consider a 5-year project with an initial fixed asset investment of $350,000, straight-line depreciation to zero over the project's life, a zero salvage value, a
Consider a 5-year project with an initial fixed asset investment of $350,000, straight-line depreciation to zero over the project's life, a zero salvage value, a selling price of $30, variable costs of $20, fixed costs of $139,700, a sales quantity of 110,000 units, and a tax rate of35 percent. What is the sensitivity of OCF to changes in quantity sold? (Hint: Calculate the difference of OCF when the units sold increases by 1 unit)
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