Question: QUESTION 9 10 points Save Answer Suncas is analyzing a proposed 3-year project using standard sensitivity analysis. The company expects to sell 20,000 units, A+4

QUESTION 9 10 points Save Answer Suncas is analyzing a proposed 3-year project using standard sensitivity analysis. The company expects to sell 20,000 units, A+4 percent. The expected variable cost per unit is $12 and the expected fixed costs are $70,000. The fixed and variable cost estimates are considered accurate within a +5 percent range. The sales price is estimated at $18 a unit, Au5 percent. The project requires an initial investment of $192,000 for equipment that will be depreciated using the straight-line method to zero over the project's life. The equipment can be sold for $45,000 at the end of the project. The project requires $20,000 in net working capital for the three years. The discount rate is 10% percent and tax rate is 25 percent. What is the operating cash flow under the optimistic case scenario? $73,250 $96,128 $79,101 $89,247 $83,125 QUESTION 10 10 points Save Answer Abbey Company has compiled this information related to a new project: Initial investment: $460,000; Fixed costs: $256,000: Variable costs: $16 per unit: Selling price: $40 per unit; Discount rate: 13 percent; Project life: 5 years; Tax rate: 25 percent. Fixed assets are depreciated using straight-line depreciation over the project's life. What is the financial break-even point? 18,547 18,018 17,520 17,008 16,655
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
