ABC Co. has compiled these estimates for a new 1-year project: Sales of 1,650 units, ± 5 percent; sales price of $17 a unit, ± 1 percent; variable costs per unit of $7.49, ± 3 percent; fixed costs of $3,800, ± 1 percent; and depreciation of $2,200. The company bases its sensitivity analysis on the expected case scenario. If the company conducts a sensitivity analysis at a sales price of $16.25, what will be the earnings before interest and taxes? Multiple Choice $8,530 $8,709 $8,454 $8,265 $8,510
$8,454
Sales=Units*Sale price | 26812.5 |
Variable cost= Units*VC per unit | 12358.5 |
Fixed costs | 3800 |
Depreciation | 2200 |
EBIT | 8454 |
ABC Co. has compiled these estimates for a new 1-year project: Sales of 1,650 units, ±...
Sloan Transmissions, Inc., has the following estimates for its new gear assembly project: price = $3,100 per unit; variable costs = $620 per unit; fixed costs = $4.4 million; quantity = 92,000 units. Suppose the company believes all of its estimates are accurate only to within ±15 percent. What values should the company use for the four variables given here when it performs its best-case scenario analysis? What about the worst-case scenario? Scenario Units Sales Unit Price Unit Variable cost...
1. Miller Mfg. is analyzing a proposed project. The company expects to sell 8,000 units, plus or minus 4 percent. The expected variable cost per unit is $11 and the expected fixed costs are $290,000. The fixed and variable cost estimates are c accurate within a plus or minus 5 percent range. The depreciation estimated at $64 a unit, give or take 3 percent. What is the operating cash flow under the best case scenario? expense is $68,000. The tax...
Olin Transmissions, Inc., has the following estimates for its new gear assembly project: price = $1,400 per unit; variable costs = $220 per unit, fixed costs = $3.9 million, quantity = 85,000 units. Suppose the company believes all of its estimates are accurate only to within +15 percent. What values should the company use for the four variables given here when it performs its best-case scenario analysis? What about the worst-case scenario? 15% Price accuracy Variable cost accuracy Fixed cost...
Sloan Transmissions, Inc., has the following estimates for its new gear assembly project: price = $3,000 per unit; variable costs = $600 per unit; fixed costs = $1.8 million; quantity = 90,000 units. Suppose the company believes all of its estimates are accurate only to within ±20 percent. What values should the company use for the four variables given here when it performs its best-case scenario analysis? What about the worst-case scenario?
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Automatic Transmissions, Inc., has the following estimates for its new gear assembly project: price = $1,210 per unit; variable cost = $430 per unit; fixed costs = $4.94 million; quantity = 84,000 units. Suppose the company believes all of its estimates are accurate only to within +18 percent. What values should the company use for the four variables given here when it performs its best-case and worst-case scenario analysis? (Do not round intermediate calculations and enter your answers...
Olin Transmissions, Inc., has the following estimates for its new gear assembly project: price = $133 per unit; variable costs = $25 per unit; fixed costs = $39,864; quantity = 6,913 units. Suppose the company believes all of its estimates are accurate only within +/-19 percent. What is the company's EBIT when it performs its worst-case scenario analysis?
Automatic Transmissions, Inc., has the following estimates for its new gear assembly project: price = $1.250 per unit: variable cost = $470 per unit: fixed costs = $4.98 million; quantity = 88.000 units. Suppose the company believes all of its estimates are accurate only to within 21 percent. What values should the company use for the four variables given here when it performs its best-case and worst-case scenario analysis? (Do not round Intermediate calculations and enter your answers in dollars,...
Automatic Transmissions, Inc., has the following estimates for its new gear assembly project: price = $1,220 per unit; variable cost = $440 per unit; fixed costs = $4.95 million; quantity = 85,000 units. Suppose the company believes all of its estimates are accurate only to within ± 19 percent. Required: What values should the company use for the four variables given here when it performs its best-case and worst-case scenario analysis? (Do not round intermediate calculations. Enter your answers in...
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...
Precise Machinery is analyzing a proposed project. The company expects to sell 7,500 units, ±10 percent. The expected variable cost per unit is $314 and the expected fixed costs are $647,000. Cost estimates are considered accurate within a ±4 percent range. The depreciation expense is $187,000. The sales price is estimated at $849 per unit, give or take 2 percent. The tax rate is 21 percent. The company is conducting a sensitivity analysis on the sales price using a sales...