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Automatic Transmissions, Inc., has the following estimates for its new gear assembly project: price = $1,250 per unit; variable cost = $470 per unit; fixed
Automatic Transmissions, Inc., has the following estimates for its new gear assembly project: price = $1,250 per unit; variable cost = $470 per unit; fixed costs = $4.98 million; quantity = 88,000 units. Suppose the company believes all of its estimates are accurate only to within 21 percent. What values should the company use for the four variables given here when it performs its best-case and worst-case scenario analysis?
Scenario | Unit Sales | Unit Price | Unit Variable Cost | Fixed Costs | |||
Base case | 88,000 | $ | 1,250 | $ | 470 | $ | 4,980,000 |
Best case | |||||||
Worst case | |||||||
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