Windows and More is reviewing a project with sales of 6,200 units, ±2 percent, at a sales price of $29, ±1 percent, per unit. The expected variable cost per unit is $11, ±3 percent, and the expected fixed costs are $87,000, ±1 percent. The depreciation expense is $68,000 and the tax rate is 21 percent. What is the net income under the worst-case scenario?
A) −$38,578
B) −$39,713
C) $15,846
D) -$28,704
E) $4,696

Question

Quizplus · Accepted Answer

In the worst-case scenario, sales and prices are at their lowest, and costs are at their highest. Calculate the worst-case sales revenue, variable costs, and fixed costs, then determine the net income considering depreciation and taxes.

Windows and More Is Reviewing a Project with Sales of 6,200