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svp [43]
3 years ago
11

The expected variable cost per unit for a proposed project is $8.48 and the expected fixed cost is $27,400. The cost estimates h

ave a plus or minus range of 5 percent. The depreciation expense is $13,290 and the tax rate is 35 percent. The sale price is estimated at $13.29 a unit, give or take 2 percent. If the firm bases its sensitivity analysis on the base case estimates, what will be the operating cash flow for a sensitivity analysis of 9,200 units?
Business
1 answer:
Lynna [10]3 years ago
3 0

Answer:

$15605.30.

Operating cash flows = [9200 units ($13.29 - $8.48) - $27400 ] ( 1 - 0.35) + $13290 (0.35)

= $10953.8 + $4651.5

= $15605.3.

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