Stellar Plastics Is Analyzing a Proposed Project

question 10

Multiple Choice

Stellar Plastics is analyzing a proposed project.The company expects to sell 12,000 units,plus or minus 5 percent.The expected variable cost per unit is $3.20 and the expected fixed costs are $30,000.The fixed and variable cost estimates are considered accurate within a plus or minus 5 percent range.The depreciation expense is $24,000.The tax rate is 34 percent.The sales price is estimated at $7.50 a unit,plus or minus 4 percent.What is the operating cash flow for a sensitivity analysis using total fixed costs of $31,000?

• A)$19,580
• B)$21,756
• C)$27,210
• D)$31,460
• E)$37,540

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Definitions:

Ectoderm

The outermost layer of cells or tissue of an embryo in early development, which gives rise to the outer layer of skin, nails, hair, and nervous system.

Inner Layer

The deeper or internal part of something, often used in a metaphorical sense to describe the core aspects of concepts or objects.

Endoderm

The innermost layer of cells or tissue of an embryo in early development, giving rise to the lining of the digestive and respiratory systems.

Ectoderm

The outermost layer of cells in the developing embryo, giving rise to the nervous system and skin.