CanDo SA Is Analyzing a Proposed Project

question 73

Multiple Choice

CanDo SA is analyzing a proposed project.The company expects to sell 12,000 units, give or take 4%.The expected variable cost per unit is €7 and the expected fixed cost is €36,000.The fixed and
Variable cost estimates are considered accurate within a plus or minus 6% range.The depreciation
Expense is €30,000.The tax rate is 34%.The sale price is estimated at €14 a unit, give or take 5%.
The company bases its sensitivity analysis on the expected case scenario.What is the earnings
Before interest and taxes under the pessimistic case scenario?

• A)-€566.02
• B)-€422.40
• C)-€278.78
• D)€3,554.50
• E)€5,385.60

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Definitions:

Heroin

An opioid drug made from morphine, a natural substance taken from the seed pod of various opium poppy plants, often used illicitly for its euphoric effects.

Marijuana

A psychoactive drug derived from the Cannabis plant, used for recreational or medicinal purposes.

Cocaine

A powerful and illegal stimulant drug derived from the leaves of the coca plant.

Marijuana Use

The consumption of cannabis, which can have various effects, both medicinal and recreational, on the body and mind.