The Motor Works Is Considering an Expansion Project with Estimated

question 97

Multiple Choice

The Motor Works is considering an expansion project with estimated annual fixed costs of $71,000, depreciation of $38,500, variable costs per unit of $17.90 and an estimated sales price of $28 per unit. How many units must the firm sell to break-even on a cash basis?

• A)6,521 units
• B)7,030 units
• C)7,510 units
• D)9,667 units
• E)10,842 units

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Definitions:

Probability

A measure of how likely an event is to occur, expressed as a number between 0 and 1.

Satisfied Customers

Individuals who have had their expectations met or exceeded by a product or service, leading to a positive perception of the business.

Probability

A representation of event likelihood, numerically expressed within a 0 to 1 scale.

Normal Model

A type of statistical distribution that is symmetric and bell-shaped, describing how data values are dispersed or spread out.