The Alfonso Company Is Analyzing a Project with Expected Sales

question 216

Multiple Choice

The Alfonso Company is analyzing a project with expected sales of 4,000 units, give or take 5 percent. The expected variable cost per unit is $9 and the expected total fixed costs are $17,000. Cost estimates are considered accurate within a plus or minus 2 percent range. The depreciation expense is $3,000. The sale price is estimated at $18 a unit, give or take 5 percent. Sensitivity analysis is based on the most likely scenario.

What is the sales revenue under the worst case scenario?

• A) $64,980
• B) $68,400
• C) $71,820
• D) $72,610
• E) $75,600

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Definitions:

Social Forces

Complex societal factors that influence the behaviors, attitudes, and actions of individuals and groups within a society.

Population Growth

The increase in the number of individuals in a population, influenced by factors such as birth rates, death rates, and migration patterns.

Natural Laws

Fundamental moral principles regarded as a basis for all human conduct, often thought to be inherent and universal.

Procreate

The act of reproducing or generating offspring, a fundamental biological process across various species, including humans.