You Are Analyzing a Project and Have Developed the Following

question 46

Multiple Choice

You are analyzing a project and have developed the following estimates: unit sales = 3,100, price per unit = $211, variable cost per unit = $115, fixed costs = $164,000. The depreciation is $59,000 a year and the tax rate is 35 percent. What effect would the sale of one more unit have on the operating cash flow?

• A) $60.90
• B) $61.40
• C) $61.80
• D) $62.40
• E) $62.70

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Definitions:

Doctrine Of Part-Performance

A legal concept in contract law that allows an unwritten contract to be enforced if one party has taken significant steps to perform their part.

Quantum Meruit

A doctrine in contract law that allows a person to recover reasonable value of services rendered, when a contract does not exist or is unclear, based on the idea of preventing unjust enrichment.

Abandoned Contract

A contract that is no longer active because all parties have ceased to perform their obligations.

Quantum Meruit

A Latin term meaning "as much as he has earned," used in legal context to denote compensation deserved for services or work done when no contract exists.