Precise Machinery Is Analyzing a Proposed Project

question 65

Multiple Choice

Precise Machinery is analyzing a proposed project.The company expects to sell 2,100 units,give or take 5 percent.The expected variable cost per unit is $260 and the expected fixed costs are $589,000.Cost estimates are considered accurate within a plus or minus 4 percent range.The depreciation expense is $129,000.The sales price is estimated at $750 per unit,give or take 2 percent.The tax rate is 35 percent.The company is conducting a sensitivity analysis on the sales price using a sales price estimate of $755.What is the operating cash flow based on this analysis?

• A)$337,975
• B)$293,089
• C)$86,675
• D)$354,874
• E)$368,015