The Adept Co

question 71

Multiple Choice

The Adept Co. 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:

Cognitive Development

The study of how thinking, problem solving, and intelligence change and mature throughout life, especially during childhood.

Inductive Reasoning

A logical process in which multiple premises, all believed true or found true most of the time, are combined to obtain a specific conclusion.

Deductive Reasoning

A logical process in which a conclusion follows necessarily from the stated premises; inference from general to specific.

Inductive Reasoning

A method of reasoning in which specific observations or examples are used to form a general conclusion or principle.