Green Gardens Is Analyzing a Proposed 5-Year Project That Requires

question 24

Multiple Choice

Green Gardens is analyzing a proposed 5-year project that requires an investment of $77,000 in fixed assets and $17,400 in net working capital.The company uses straight-line depreciation over a project's life.Sales are estimated at 24,000 units ±3 percent.The expected variable cost per unit is $17,and the expected fixed costs are $39,000.The fixed and variable cost estimates are considered accurate within a range of ±2 percent.The sales price is estimated at $36 a unit,±1 percent.The discount rate is 16 percent,and the tax rate is 35 percent.What is the net income under the pessimistic case scenario?

• A)$241,048.60
• B)$232,009.48
• C)$244,517.20
• D)$220,001.32
• E)$248,519.70

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Definitions:

Moutza

A traditional gesture of insult in Greek culture, involving the extension of all five fingers and presenting the palm towards someone.

Intensity

The strength, concentration, or degree of force or energy exhibited in an activity, situation, or expression.

Perceptual Selection

The cognitive process through which people filter and interpret sensory information, focusing on certain stimuli while ignoring others.

Interpretation

The process of explaining or understanding the meaning of something, such as data or events.