The Adept Co

question 79

Multiple Choice

The Adept Co. is analyzing a proposed project. The company expects to sell 2,500 units,give or take 10%. The expected variable cost per unit is $8 and the expected fixed costs are $12,500. Cost estimates are considered accurate within a plus or minus 5% range. The depreciation expense is $4,000. The sale price is estimated at $16 a unit,give or take 2%. The company bases its sensitivity analysis on the expected case scenario. The company conducts a sensitivity analysis using a variable cost of $9. The total variable cost estimate will be:

• A) $21,375
• B) $22,500
• C) $23,625
• D) $24,125
• E) $24,750

---

Definitions:

Outstanding Shares

Refers to the total number of shares of a corporation's stock that are owned by shareholders at any given time.

Acquisition Costs

Expenses directly associated with acquiring a new customer or asset, including marketing, sales expenses, and the cost of the goods or services themselves.

Contingent Consideration

An obligation of a buyer to transfer additional assets or equity interests to a seller if future events occur or conditions are met after a business combination.

Fair Value

The expected monetary return from disposing of an asset or the expense of relocating a liability in a controlled market interaction at the time of evaluation.