A Project Has These Estimated Values: Sales Quantity of 4,600

question 29

Multiple Choice

A project has these estimated values: sales quantity of 4,600 units ± 2 percent; variable cost per unit of $17,± 3 percent; annual fixed costs of $46,900,± 1 percent; annual depreciation of $17,300; and a sales price of $39 a unit,± 10 percent.The company bases its sensitivity analysis on the expected scenario.What will be the operating cash flow for a sensitivity analysis based on a sales price of $35 a unit and a tax rate of 21 percent?

• A)$27,319
• B)$32,400
• C)$31,994
• D)$26,700
• E)$23,508

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Definitions:

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