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The Projections for a New One-Year Project Show Sales of 8,500

Question 59

Multiple Choice

The projections for a new one-year project show sales of 8,500 units,± 5 percent; variable costs per unit of $28.62,± 3 percent; and fixed costs of $164,000,± 3 percent.Depreciation is $62,000 and the tax rate is 23 percent.The sale price is $55 a unit,± 2 percent.The company bases its sensitivity analysis on the expected scenario.What is the operating cash flow for a sensitivity analysis using total fixed costs of $170,000?


A) $62,406.67
B) $58,219.90
C) $61,311.07
D) $56,017.10
E) $52,048.80

Correct Answer:

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