The Can-Do Co

question 19

Multiple Choice

The Can-Do Co. 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