Question

2. Stellar Plastics is analyzing a proposed project. The company expects to sell 12,000 units, plus or minus 5 percent. The expected variable cost per unit is $3.20 and the expected fixed costs are $30,000. The fixed and variable cost estimates are considered accurate within a plus or minus 5 percent range. The depreciation expense is $24,000. The tax rate is 34 percent. The sales price is estimated at $7.50 a unit, plus or minus 4 percent. What is the operating cash flow for a sensitivity analysis using total fixed costs of $31,000? .S19,580 $21,756 $27,210 S31,460 $37,540 The accounting break-even production quantity for a project is 12,320 units. The fixed costs are $216,000 and the contribution rgin per unit is $28. The fixed assets required for the project will be depreciated on straight-line basis to zero over the project's ear life. What is the amount of fixed assets required for this project? S325,920 S644,800 $748,500 $1,080,000 $1,629,600 e Motor Works is considering an expansion project with estimated annual fixed costs of $71,000, depreciation of $38,500, ble costs per unit of $17.90 and an estimated sales price of $26.50 per unit. How many units must the firm sell to break-even cash basis? 6,521 units 8,256 units 8,510 units 9,667 units 0,842 units Page 1o

Answer 1