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A project has expected sales of 6,000 units, a selling price of $54 a unit, variable costs equal to 62% of sales, fixed costs of $72,000, and depreciation of $13,500. Assume that total revenues and fixed costs change by 5% in a pessimistic situation. What would the pretax profits be, per year, if the pessimistic situation should occur? Show your computations.
Non-Interest-Bearing
A financial instrument or account that does not earn interest over time, implying that its value does not increase beyond the principal amount.
Promissory Note
A finance-related written assurance where one party obligates to pay the other a clearly defined monetary amount, either when required or at a particular future time.
Discounted
Refers to the process of determining the present value of a future amount of money or stream of cash flows given a specific rate.
TD Canada Trust
One of Canada's prominent banking and financial services providers, known for offering a wide range of personal and business banking solutions.
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