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(Missed the first part of the question) Depreciable to zero over 4 years. The discount rate is 10%. The tax rate is 34%. Additional information

(Missed the first part of the question) Depreciable to zero over 4 years. The discount rate is 10%. The tax rate is 34%. Additional information for variables with forecast error is shown below. Variables can bounce between lower and upper bound independently from each other.

Base Case Lower Bound Upper Bound

Unit Sales 3,000 2,750 3,250

Price/Unit $14 $13 $16

Variable cost/unit $9 $8 $10

Fixed costs $4,500 $4,000 $5,000

What is the best case OCF for the project?

  1. $8,770
  2. $10,420
  3. $12,680
  4. $14,940
  5. $15,370

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