Question: [Extra 3 points from chapter 7] Assume a project has these estimated values: Sales quantity of 4,000 units, plus or minus 5 percent; variable cost
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[Extra 3 points from chapter 7] Assume a project has these estimated values: Sales quantity of 4,000 units, plus or minus 5 percent; variable cost per unit of $17, plus or minus 3 percent; fixed costs of $45,000, plus or minus 2 percent; depreciation of $17,000; and a sales price of $40 a unit, plus or minus 10 percent. The tax rate is 34 percent. The company bases its sensitivity analysis on the expected case scenario. (Answer format: keep the integer, no comma, and no dollar sign. e.g., 1234.6 >1235 ) 1) Fill in the blanks 2) What will be the operating cash flow under best-case scenario and worse- case scenario ? Hint: OCF =(NIdepreciation))(1 tax rate )+ depreciation, where NI= revenue cost (1) Sale unit (2)Salepriceperuni(3)Revenue=(1)(2)cost(4)Cost=(1)unitcost+fixed Expected 4,000 40 160,000 $113,000 =4,00017+45,000 Pessimistic
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