CanDo SA Is Analyzing a Proposed Project

question 58

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 contribution
Margin per unit for a sensitivity analysis using a variable cost per unit of €8?

• A)€3
• B)€4
• C)€5
• D)€6
• E)€7

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Definitions:

Halo Effect

The assumption that because people have one desirable trait (e.g., attractiveness), they also possess many other desirable traits (e.g., intelligence).

Fear-based Messaging

A strategy that uses scare tactics or the threat of negative consequences to influence behavior or attitudes.

Moderate-fear Message

Communication that utilizes a moderate level of fear to persuade or motivate behavior change without overwhelming the audience.

Low-fear Message

A type of persuasive message that induces a minimal level of fear, intended to influence attitudes or behaviors without causing excessive anxiety.