Reference no: EM132379751

Fisher, Inc. is analyzing a proposed 3-year project using standard sensitivity analysis. The company expects to sell 25,000 units, ±4 percent. The expected variable cost per unit is $13.20 and the expected fixed costs are $60,000. The fixed and variable cost estimates are considered accurate within a ±5 percent range. The sales price is estimated at $17.20 a unit, ±5 percent. The project requires an initial investment of $220,000 for equipment that will be depreciated using the straight-line method to zero over the project's life. The equipment can be sold for $52,400 at the end of the project. The project requires $20,000 in net working capital for the three years. The discount rate is 12% percent and tax rate is 25 percent. What is the operating cash flow under the optimistic case scenario?