57.Assume a project has these estimated values: Sales quantity of 4,600 units, plus or minus 2 percent; variable cost per unit of $17, plus or minus 3 percent; fixed costs of $46,900, plus or minus 1 percent; depreciation of $17,300; and a sales price of $39 a unit, plus or minus 10 percent. The tax rate is 34 percent. The company bases its sensitivity analysis on the expected case scenario. What will be the operating cash flow for a sensitivity analysis based on a sales price of $35 a unit? 58.CC’s is analyzing a proposed project with anticipated sales of 3,620 units, give or take 5 percent at a sales price of $24, plus or minus 2 percent.. The variable cost per unit is $14.60, plus or minus 4 percent, and the fixed costs are $12,900, plus or minus 1 percent. The depreciation expense is $8,100. If the company conducts a sensitivity analysis using a variable cost of $16, the total variable cost estimate will be:
A. $27,319B. $32,400C. $29,576D. $26,700E. $23,508A. $53,470B. $54,900C. $55,500D. $57,920E. $61,050
AACSB: Analytical Thinking
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Blooms: Analyze
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Ross - Chapter 07 #57
Section: 7.1
Topic: Sensitivity analysis
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Ross - Chapter 07 #58
Section: 7.1
Topic: Sensitivity analysis
59.A firm is reviewing a project with a labor cost of $18.90 per unit, raw materials cost of $21.63 a unit, and fixed costs of $8,000 a month. Sales are projected at 7,200 units total for the 3-year life of the project. What are the total variable costs per year?
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Ross - Chapter 07 #59
Section: 7.1
Topic: Break-even analysis
60.A project has earnings before interest and taxes of $5,750, fixed costs of $50,000, a selling price of $13 a unit, and a sales quantity of 11,500 units. Depreciation is $7,500. What is the variable cost per unit?
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Ross - Chapter 07 #60
Section: 7.1
Topic: Break-even analysis
61.At a production level of 5,600 units, a project has total costs of $89,000. The variable cost per unit is $11.20. What is the amount of the total fixed costs?
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Ross - Chapter 07 #61
Section: 7.1
62.A project has a contribution margin of $2.16 per unit. If the sales price per unit is $11 and the fixed costs are $24,700, what is the amount of total costs at a production level of 6,000 units?
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Ross - Chapter 07 #62
Section: 7.1
Topic: Break-even analysis