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SCORPION-xisa [38]
3 years ago
11

ABC Co. expects to sell 2,200 units, give or take 10 percent. The expected variable cost per unit is $8.43 and the expected fixe

d costs are $9,500. Cost estimates are considered accurate within a plus or minus 5 percent range. The depreciation expense is $4,000. The sale price is estimated at $16 a unit, give or take 2 percent. The company bases its sensitivity analysis on the expected case scenario. If the company conducts a sensitivity analysis on the sales price using a price estimate of $16.25, what will be the earnings before interest and taxes
Business
1 answer:
topjm [15]3 years ago
3 0

Answer:

Earning Before Interest and Taxes                                           $3,704

Explanation:

Sales (2,200 * 16.25)                                                                 35,750

Less: Variable Costs (2,200 * 8.43)                                          <u>(18,546)</u>

Contribution Margin                                                                   17,204

Less: Fixed Cost                                                                         (9,500)

         Depreciation Expense                                                      <u>(4,000)</u>

Earning Before Interest and Taxes                                           <u>$3,704</u>

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The company's wacc is 10. 5%. what is the irr of the better project? (hint: the better project may or may not be the one with th
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The better Project is Project S having a NPV of $17.968 and IRR of 12.10 %

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  • An approach to capital budgeting that is used to assess the profitability of a project is the discounted payback time. Internal rate of return is one of these capital planning strategies (IRR).
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The calculator's capabilities will be utilized to determine the IRR,

Project S

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Learn more about IRR here brainly.com/question/7920964

#SPJ4

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