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Consider a project with the following information: Initial fixed asset investment = $485,000; straight-line depreciation to zero over the 4-year life; zero salvage value; price
Consider a project with the following information: Initial fixed asset investment = $485,000; straight-line depreciation to zero over the 4-year life; zero salvage value; price = $41; variable costs = $24; fixed costs = $189,000; quantity sold = 90,000 units; tax rate = 23 percent. How sensitive is OCF to changes in quantity sold?
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