Adept NV Is Analyzing a Proposed Project

question 15

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 amount of the fixed cost per unit under the pessimistic case scenario?

• A)€4.55
• B)€5.00
• C)€5.83
• D)€6.02
• E)€6.55

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Definitions:

Markets

Places or systems where buyers and sellers interact to trade goods, services, or resources.

Free Enterprise

An economic system where private individuals rather than the government have the right to own property and conduct businesses, subject to minimal regulatory constraints.

Laissez-Faire

A belief system in economics that supports capitalism with minimal to no government interference.

Market System

An economic system in which decisions regarding investment, production, and distribution are based on supply and demand, and prices of goods and services are determined in a free price system.