Project

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