Automatic Transmissions, Inc., has the following estimates for its new gear assembly project: price = $940 per

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Automatic Transmissions, Inc., has the following estimates for its new gear assembly project: price = $940 per unit; variable cost = $340 per unit; fixed costs = $3.4 million; quantity = 53,000 units. Suppose the company believes all of its estimates are accurate only to within ±15 percent. What values should the company use for the four variables given here when it performs its best-case scenario analysis? What about the worst-case scenario?

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Essentials of Corporate Finance

ISBN: 978-1260013955

10th edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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