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York Inc. is analyzing a proposed project. The company expects to sell 20,000 units each year, plus or minus 3 percent. The expected variable cost
York Inc. is analyzing a proposed project. The company expects to sell 20,000 units each year, plus or minus 3 percent. The expected variable cost per unit is $15 and the expected fixed cost is $35,000. The variable cost per unit estimate is considered accurate within a plus or minus 3 percent range. The depreciation expense is $32,000. The tax rate is 34 percent. The sale price is estimated at $19 a unit, give or take 3 percent. What is the net income under the worst-case scenario? (assume income taxes are recovered if there is a loss).
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