You Are Analyzing a Project and Have Developed the Following

question 102

Multiple Choice

You are analyzing a project and have developed the following estimates.The depreciation is $1,020 a year and the tax rate is 35 percent.What is the worst-case operating cash flow? $$\begin{array} { | l | r | r | r | } \hline & \text { Base-Case } & \text { Lower Bound } & \text { Upper Bound } \\\hline \text { Unit sales } & 1,300 & 1,150 & 1,450 \\\hline \text { Sales price per unit } & \$ 19 & \$ 16 & \$ 22 \\\hline \text { Variable cost per unit } & \$ 12 & \$ 10 & \$ 14 \\\hline \text { Fixed costs } & \$ 1,400 & \$ 1,350 & \$ 1,450 \\\hline\end{array}$$

• A)-$110.50
• B)-$64.10
• C)$909.50
• D)$209.00
• E)$660.50

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Definitions:

Central Nervous System

Comprises the brain and spinal cord, and is responsible for processing information and controlling the body's functions and activities.

Bronchopulmonary Dysplasia

A chronic lung disorder often affecting newborns, particularly those who were born prematurely, leading to difficulty breathing.

Mechanical Ventilation

A method of assisting or controlling breathing by means of a mechanical ventilator.

Pneumothorax

The presence of air in the pleural space causing the lung to collapse, leading to shortness of breath and chest pain.