You Are Analyzing a Project and Have Developed the Following

question 84

Multiple Choice

You are analyzing a project and have developed the following estimates.The depreciation is $13,600 a year and the tax rate is 34 percent.What is the base-case operating cash flow? $$\begin{array} { | l | r | r | r | } \hline & \text { Base-Case } & \text { Lower Bound } & \text { Upper Bound } \\\hline \text { Unit sales } & 2,100 & 1,850 & 2,350 \\\hline \text { Sales price per unit } & \$ 55 & \$ 53 & \$ 57 \\\hline \text { Variable cost per unit } & \$ 37 & \$ 36 & \$ 38 \\\hline \text { Fixed costs } & \$ 14,800 & \$ 13,800 & \$ 15,800 \\\hline\end{array}$$

• A)$8,770
• B)$6,204
• C)$11,433
• D)$19,804
• E)$20,410