Precise Machinery Is Analyzing a Proposed Project

question 44

Multiple Choice

Precise Machinery is analyzing a proposed project. The company expects to sell 7,500 units, ±10 percent. The expected variable cost per unit is $314 and the expected fixed costs are $647,000. Cost estimates are considered accurate within a ±4 percent range. The depreciation expense is $187,000. The sales price is estimated at $849 per unit, give or take 2 percent. The tax rate is 21 percent. The company is conducting a sensitivity analysis on the sales price using a sales price estimate of $850. What is the operating cash flow based on this analysis?

• A) $2,703,940
• B) $2,293,089
• C) $1,986,675
• D) $2,354,874
• E) $2,284,837

---

Definitions:

Hull-Spence Model

A theory of learning that integrates drive reduction and incentive motivation, proposing that a combination of stimuli and past reinforcements can predict behavior.

Generalization Gradients

In learning theory, the range and degree to which a learned response is produced to stimuli that vary from the original conditioned stimulus.

Discrimination Training

The process in behavioral psychology of training an organism to respond differently to distinct stimuli, enhancing its ability to distinguish between them.

Inhibitory Generalization

The process by which an organism learns to inhibit responses to stimuli that are similar to a conditioned stimulus that signals an aversive event.