CanDo SA Is Analyzing a Proposed Project

question 10

Multiple Choice

CanDo SA is analyzing a proposed project.The company expects to sell 12,000 units,give or take 4%.The expected variable cost per unit is €7 and the expected fixed cost is €36,000.The fixed and variable cost estimates are considered accurate within a plus or minus 6% range.The depreciation expense is €30,000.The tax rate is 34%.The sale price is estimated at €14 a unit,give or take 5%.The company bases its sensitivity analysis on the expected case scenario.What is the earnings before interest and taxes under the expected case scenario?

• A)€18,000
• B)€24,000
• C)€36,000
• D)€48,000
• E)€54,000

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Definitions:

Median

A value that divides a dataset into two equal halves, representing the middle value when the data set is ordered.

StdDev

A measurement that quantifies the amount of variation or dispersion in a set of data values, same as Standard Deviation.

Mean

The mean value of a collection of numbers, obtained by dividing the total sum of the numbers by the quantity of numbers in the collection.

Median

The middle value in a dataset when it is arranged in ascending or descending order, or the average of the two middle values when the dataset has an even number of observations.