TD, Inc. is analyzing a new project. The data they have gathered to date is as follows:

	Expected Value	Range
Sales quantity	12000	10.00%
Sales price per unit	$21	5%
Variable cost per unit	$11	3%
Fixed cost	$44,000	1%

Initial requirement for equipment:	$80,000
Depreciation:	Straight-line to zero over the two-year life of the Project with no salvage value.
Required rate of return:	12%
Marginal tax rate:	34%

What are the annual variable costs under the worst-case scenario?

Multiple Choice

A$122,364

B$115,236

C$149,556

D$128,040

E$135,960