The Creamery Is Analyzing a Project with Expected Sales of 5,700

question 16

Multiple Choice

The Creamery is analyzing a project with expected sales of 5,700 units, ±5 percent. The expected variable cost per unit is $168 and the expected fixed costs are $424,000. Cost estimates are considered accurate within a ±3 percent range. The depreciation expense is $156,000. The sales price is estimated at $339 per unit, ±5 percent. The tax rate is 21 percent. The company is conducting a sensitivity analysis with fixed costs of $425,000. What is the OCF given this analysis?

• A) $416,511
• B) $385,350
• C) $467,023
• D) $394,874
• E) $421,300

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Definitions:

Sensory Deficit

A condition resulting from impairment of one or more of the senses, leading to difficulties in receiving and interpreting sensory information.

Neurological Deficit

A decrease in the functioning of the nervous system, manifesting as loss of sensory or motor function.

Balance Deficit

A condition where an individual has difficulty maintaining physical stability, impacting their ability to perform daily activities safely.

Conductive Hearing Loss

A type of hearing loss that occurs when sound is not conducted efficiently through the outer ear canal to the eardrum and the tiny bones (ossicles) of the middle ear.