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The Creamery is analyzing a project with expected sales of 5,700 units. The expected variable cost per unit is $168 and the expected fixed costs
The Creamery is analyzing a project with expected sales of 5,700 units. The expected variable cost per unit is $168 and the expected fixed costs are $424,000. The project will have an initial cost for fixed assets of $468,000, a three-year life, and no salvage value; depreciation is straightline to zero. The sales price is estimated at $339 per unit. Cost estimates, expected sales, and sales price are considered accurate within a \pm 3 percent range. The tax rate is 21 percent. The company is conducting sensitivity analyses on cost estimates, expected sales, and sales price. Which variable has the highest forecasting risk
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