Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A company is doing sensitivity analysis for an investment project. The company expects to sell 2 3 , 0 0 0 units, pm 8

A company is doing sensitivity analysis for an investment project. The company expects to sell 23,000 units, \pm 8 percent. The expected variable cost per unit is $20 and the expected fixed costs are $65,000. Cost estimates are considered accurate within a \pm 5 percent range. The depreciation expense is $15,000. The sale price is estimated at $45 a unit, \pm 3 percent. What is the sales revenue under the pessimistic case scenario?
$843,318
$883,476
$923,634
$963,792
$1,003,950

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions