CanDo SA Is Analyzing a Proposed Project

question 49

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 operating cash flow for a sensitivity analysis using total fixed costs of €32,000?

• A)€14,520
• B)€16,520
• C)€22,000
• D)€44,520
• E)€52,000

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Definitions:

Effects

Changes that result from specific actions or causes.

Medulla

The medulla is a part of the brainstem that controls vital bodily functions such as respiratory rate, heart rate, and blood pressure.

Respirator

A device designed to protect the wearer from inhaling harmful dusts, fumes, vapors, or gases, or to provide breathable air in environments that are oxygen-deficient.

Brain Damage

Physical harm to the brain that can result in impaired cognitive, physical, or emotional functions, often due to injury or disease.