The Can-Do Co

question 65

Multiple Choice

The Can-Do Co. is analyzing a proposed project. The company expects to sell 12,000 units,give or take 4%. The expected variable cost per unit is $7 and the expected fixed cost is $36,000. The fixed and variable cost estimates are considered accurate within a plus or minus 6% range. The depreciation expense is $30,000. The tax rate is 34%. The sale price is estimated at $14 a unit,give or take 5%. The company bases its sensitivity analysis on the expected case scenario. What is the earnings before interest and taxes under the optimistic case scenario?

• A) $22,694.40
• B) $24,854.40
• C) $37,497.60
• D) $52,694.40
• E) $67,947.60

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Definitions:

Square Root

A value that, when multiplied by itself, gives the original number, representing the inverse operation of squaring a number.

Simplify Expression

The process of rewriting an expression in a simpler or more compact form without changing its value.

Square Root

A specific value that, when it is multiplied by itself, reproduces the initial figure.

Subtraction

A mathematical operation that represents the operation of removing objects from a collection.