Question: TD, Inc. is analyzing a new project. The data they have gathered to date is as follows: Expected Value Range Sales quantity 12000 10.00% Sales

TD, Inc. is analyzing a new project. The data they have gathered to date is as follows:

Expected Value Range
Sales quantity 12000 10.00%
Sales price per unit $21 5%
Variable cost per unit $11 3%
Fixed cost $44,000 1%

Initial requirement for equipment: $80,000
Depreciation: Straight-line to zero over the two-year life of the Project with no salvage value.
Required rate of return: 12%
Marginal tax rate: 34%

What are the annual variable costs under the worst-case scenario?

Multiple Choice

A$122,364

B$115,236

C$149,556

D$128,040

E$135,960

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