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Consider a three-year project with the following information: initial fixed asset investment = $885,000; straight-line depreciation...

Consider a three-year project with the following information: initial fixed asset investment = $885,000; straight-line depreciation to zero over the five-year life; zero salvage value; price = $34.65; variable costs = $22.85; fixed costs = $213,000; quantity sold = 99,000 units; tax rate = 40 percent.

What is the OCF at the base-case quantity sold?

What is the OCF at 100,000 units sold?

How sensitive is OCF to changes in quantity sold?

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