A Company Is Trying to Ascertain the Selling Price Per

question 68

Multiple Choice

A company is trying to ascertain the selling price per unit for their product. It knows the OCF is $170,654, interest expense is $21,300, and fixed costs are $116,901. Variable costs are $25.89 per
Unit with 20,000 units expected to be sold. The tax rate is 34%. Fixed assets total $759,500 and are
Being depreciated straight-line to zero over seven years. What is the selling price per unit given this
Information?

• A) $40.26
• B) $40.67
• C) $41.32
• D) $42.78
• E) $42.93

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Definitions:

Gold Futures

Contracts to buy or sell gold at a future date at a price that is agreed upon today, used for speculation or hedging.

Conservatism

In finance, it refers to a risk-averse approach to investing or managing assets, prioritizing safety and preservation of capital.

Beliefs

The conviction or acceptance that something exists or is true, especially without proof, often informing decision-making processes in various contexts, including investing.

Stock's Future Performance

Projections or estimates about how a stock will perform in the future based on various indicators and analysis.