Question
A company has the following estimates for a new project it's considering: Price = $100 per unit; Variable Costs = $30 per unit; Fixed Costs
A company has the following estimates for a new project it's considering: Price = $100 per unit; Variable Costs = $30 per unit; Fixed Costs = $1,600,000 per year; Quantity = 29,000 units sold per year. Assume the company believes all of its estimates are accurate only to within 11%. If you were performing scenario analysis and calculating the project's expected annual operating cash flows under the best-case scenario, what amount would you use for total annual cash inflow from sales (i.e. multiplying price per unit by quantity of units sold per year under best-case scenario)?
Please do not round intermediate calculations. Round the final answer to 2 decimal places.
Please show all your steps that you take to resolve this. Please be very clear, so that I understand what steps you take. If typing, please bold your responses per step. Make sure to follow all rounding instructions.
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