Question: Consider the same project as problem 1, but modify it as follows. Suppose that Direct Labor, Materials, Selling Expenses, and Other Variable Costs are forecast

Consider the same project as problem 1, but modify it as follows. Suppose that Direct Labor, Materials, Selling Expenses, and Other Variable Costs are forecast to be $4.10, $4.20, $1.10, and $2.20, respectively, in year 1 and then grow with inflation. Lease Payment, Property Taxes, Administration, Advertising, and Other cash fixed costs are forecast to be $3,900, $690,

$710, $1,120, and $810, respectively, in year 1 and then grow with inflation.

What are the Total Variable Cost / Unit and the Total Cash Fixed Costs?

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