Stellar Plastics Is Analyzing a Proposed Project with Annual Depreciation

question 56

Multiple Choice

Stellar Plastics is analyzing a proposed project with annual depreciation of $28,750 and a tax rate of 23 percent. The company expects to sell 16,500 units, ±3 percent. The expected variable cost per unit is $1.87, ±1 percent, and the expected fixed costs are $24,900, ±1 percent. The sales price is estimated at $7.99 a unit, ±2 percent. What is the operating cash flow for a sensitivity analysis using total fixed costs of $26,000?

• A) $54,208
• B) $64,347
• C) $63,591
• D) $62,408
• E) $60,540

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Definitions:

Brand Recognition

The extent to which consumers can identify a brand by its attributes, symbol, or design, without seeing the brand name.

Taco Bell

An American-based chain of fast food restaurants known for its Mexican-inspired menu items such as tacos and burritos.

Brand Messaging

Communications strategies and tactics used by companies to convey their brand's values, personality, and promises to potential and existing customers.

Competitive Environment

The dynamic external system in which a business competes and functions, including factors such as competitors, customers, and regulations.