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Precise Machinery is analyzing a proposed project. The company expects to sell 7,500 units. The expected variable cost per unit is $314 and the expected
Precise Machinery is analyzing a proposed project. The company expects to sell 7,500 units. The expected variable cost per unit is $314 and the expected fixed costs are $647,000. The depreciation expense is $187,000. The sales price is estimated at $850 per unit. The tax rate is 21 percent. Show the senstivity analysis of OCF at varying variable costs. Draw OCF lines. (Assume a required rate of return or 11 percent) Unit sales: Price per unit: Variable costs per unit: Fixed costs per year: Base Case Income Statement Sales Variable costs Fixed costs Depreciation EBIT Tax Net income
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