Question

STION 25 Your company is reviewing a project with estimated labor costs of 515 per unit, estimated raw material costs of $45 a unit, and estimated fixed costs of $25,000 a month. Sales are projected at 15,000 units, 14 percent, over the one-year life of the project. Cost estimates are accurate within a range of +2 percent. What are the total variable costs for the best-case scenario? O A $864,440 OB. 5917,280 OC. $876,716 OD. $626,320 E. 5993,720 QUESTION 26 Projects A and are mutually exclusive and have an initial cost of $78,000 each. Project A provides cash inflows of 532,000 a year for three years while Project B produces a cash inflow of $44,400 a year for two years. Which project(s) should be accepted if the discount rate is 10 percent? What if the discount rate is 12.5 percent? O A. Accept Bar 10 percent and neither at 12.5 percent OB. Accept neither Anor B at both discount rates OC. Accept both at 10 percent and neither at 12.5 percent OD. Accept B at both discount rates O E. Accept A at 10 percent and neither at 12.5 percent

Answer 1

Hi, As per the HomeworkLib guidelines, in case of multiple questions, I need to solve the first question.

The amount is computed as shown below:

= Number of units x (1 + 0.04) x [ Labor cost per unit x (1 - 0.02) + Raw material cost per unit x (1 - 0.02) ]

= 15,000 x 1.04 x [ $ 15 x 0.98 + $ 45 x 0.98 ]

= 15,600 x [ $ 14.7 + $ 44.1 ]

= $ 917,280

I request you to please post remaining questions separately, since as per the guidelines in case of multiple questions, I need to solve the first question.

Feel free to ask in case of any query relating to this question