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Consider a four-year project with the following information: initial fixed asset investment = $502,301; straight-line depreciation to zero over the four-year life; zero salvage value;
Consider a four-year project with the following information: initial fixed asset investment = $502,301; straight-line depreciation to zero over the four-year life; zero salvage value; price = $33; variable costs = $22; fixed costs = $198,270; quantity sold = 79,269 units; tax rate = 34 percent.
Calculate the sensitivity of the OCF to changes in the quantity sold. (In dollar)
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