Precise Machinery is analyzing a proposed project. The company expects to sell 2,100 units, give or take 5 percent. The expected variable cost per unit is $260 and the expected fixed costs are $589,000. Cost estimates are considered accurate within a plus or minus 4 percent range. The depreciation expense is $129,000. The sales price is estimated at $750 per unit, plus or minus 2 percent. What is the sales revenue under the worst case scenario?
A)$1,686,825
B)$1,496,250
C)$1,466,325
D)$1,543,500
E)$1,620,675

Question

Quizplus · Accepted Answer

Sales_{Worst case} = (2,100 F1F1F1S1F1F1F10 0.95) F1F1F1S1F1F1F10 ($750 F1F1F1S1F1F1F10 .98) = $1,466,325

Precise Machinery Is Analyzing a Proposed Project