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Let 2-year project with following information: initial fixed asset investment = $495,000; straight line depreciation to zero over 2-year life; selling price = $39; zero salvage value; fixed costs = $210,000; variable costs = $20;  quantity sold = 150,000 units; tax rate = 31 percent. How sensitive is Operating Cash Flow (OCF)to changes in quantity sold? Define your answer in terms of dollar amount change (increase or decrease) in OCF for every additional unit sold.

Project Management, Management Studies

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