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A company is analyzing a proposed project using standard sensitivity analysis. The company expects to sell 5,000 units, pm 15 percent. The expected variable cost
A company is analyzing a proposed project using standard sensitivity analysis. The company expects to sell 5,000 units, \pm 15 percent. The expected variable cost per unit is $18 and the expected fixed costs are $14,000. Cost estimates are considered accurate within a \pm 6 percent range. The depreciation expense is $7,000. The sale price is estimated at $24 a unit, \pm 3 percent. What is the sales revenue under the pessimistic case scenario? $105,054$103,016$100,978$98,940$96,902 QUESTION 8 Assume a machine costs $250,000 and lasts five years before it is replaced. The operating cost is $37,200 a year. Ignore taxes. What is the equivalent annual cost if the required rate of return is 15.5 percent? (Hint: the EAC should account for both investment and annual operating costs) $136,189.02$130,307.69$124,426.36$118,545.03$112,663.70
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