Precise Machinery is analyzing a proposed project. The company expects to sell 4,000 units, give or take 5 percent. The expected variable cost per unit is $221.00 and the expected fixed costs are $500,650. Cost estimates are considered accurate within a plus or minus 5 percent range. The depreciation expense is $109,650. The sales price is estimated at $641.75 per unit, give or take 5 percent. The tax rate is 35 percent. The company is conducting a sensitivity analysis on the sales price per unit using a sales price estimate of $652.34. What is the operating cash flow based on this analysis? $735,853 $798,774 $765,756 $834,439 $714,897
Precise Machinery is analyzing a proposed project. The company expects to sell 4,000 units, give or take 5 percent. The expected variable cost per unit is $221.00 and the expected fixed costs are $500,650. Cost estimates are considered accurate within a plus or minus 5 percent range. The depreciation expense is $109,650. The sales price is estimated at $641.75 per unit, give or take 5 percent. The tax rate is 35 percent. The company is conducting a sensitivity analysis on the sales price per unit using a sales price estimate of $652.34. What is the operating cash flow based on this analysis? $735,853 $798,774 $765,756 $834,439 $714,897
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Precise Machinery is analyzing a proposed project. The company expects to sell
4,000 units, give or take 5 percent. The expected variable cost per unit is $221.00
and the expected fixed costs are $500,650. Cost estimates are considered accurate
within a plus or minus 5 percent range. The depreciation expense is $109,650. The
sales price is estimated at $641.75 per unit, give or take 5 percent. The tax rate is 35
percent. The company is conducting a sensitivity analysis on the sales price per unit
using a sales price estimate of $652.34. What is the operating cash flow based on
this analysis?
$735,853
$798,774
$765,756
$834,439
$714,897
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