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OCF

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Question

We are evaluating a project that costs $835921, has an eight-year life, and has no salvage value. Assume that

depreciation is straight-line to zero over the life of the project. Sales are projected at 58003 units per year. Price per unit is $43, variable cost per unit is $15, and fixed costs are $424844 per year. The tax rate is 35%, and we require a return of 19% on this project.In percentage terms, what is the sensitivity of OCF to changes in the variable cost per unit projection?  The answer is -0.69 but I do not understand how they got the answer.

 
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