Question
The Department of Transportation is researching the pricing strategy relating to a local company called Auto-Friction Inc (AFI). AFI has the following estimates for its
The Department of Transportation is researching the pricing strategy relating to a local company called Auto-Friction Inc (AFI). AFI has the following estimates for its new gear assembly project: price = $960 per unit; variable cost = $350 per unit; fixed costs = $3.6 million; quantity = 55,000 units. Suppose the company believes all of its estimates are accurate only to within +/- 15%. What values should the company use for the four variables given here when it performs its best-case scenario analysis? What about the worse-case scenario analysis?
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