Adept NV Is Analyzing a Proposed Project

question 74

Multiple Choice

Adept NV is analyzing a proposed project.The company expects to sell 2,500 units,give or take 10%.The expected variable cost per unit is €8 and the expected fixed costs are €12,500.Cost estimates are considered accurate within a plus or minus 5% range.The depreciation expense is €4,000.The sale price is estimated at €16 a unit,give or take 2%.The company bases its sensitivity analysis on the expected case scenario.What is the sales revenue under the optimistic case scenario?

• A)€40,000
• B)€43,120
• C)€44,000
• D)€44,880
• E)€48,400

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Definitions:

Flexible Budget

A fiscal planning tool that varies with the levels of output or sales, designed to allocate resources more effectively.

Refurbishing Materials

Materials used in the process of renovating and restoring products or facilities to a like-new condition.

Planning Budget

A budget prepared for a specific level of activity, often used in flexible budgeting to adjust for various activity levels.

Containers Refurbished

The process of cleaning, repairing, and restoring used containers to a usable condition for the same or a new purpose.