The Adept Co

question 54

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. The company is conducting a sensitivity analysis on the sales price using a sales price estimate of $17. Using this value,the earnings before interest and taxes will be:

• A) $4,000
• B) $6,000
• C) $8,500
• D) $10,000
• E) $18,500

---

Definitions:

Independent-Samples T Test

A method of statistical analysis that compares the average values of two separate groups to see if their differences are statistically meaningful.

Dependent-Samples T Test

An analytical procedure aimed at comparing the averages of two connected groups to ascertain if the variance is statistically meaningful.

Well-Being

A general term for the condition of an individual or group, in terms of health, happiness, and prosperity.

Significance Level

The probability of rejecting the null hypothesis when it is actually true, used in hypothesis testing as a threshold for determining statistical significance.