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
Chapter14: Capital Structure Management In Practice
Section14.A: Breakeven Analysis
Problem 4P
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![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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0b99457a-5d7e-4e9f-bfbd-f63bbdae6381%2Ff06f8773-428c-4a90-a6c9-63f099cd4d16%2Fws6asnm_processed.jpeg&w=3840&q=75)
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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