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problem: The Can-Do Co. is examining a proposed project. The company expects to sell 12,000 units, give or take 4 percent. The expected variable cost per unit is $7 & the expected fixed cost is $36,000. The fixed & variable cost estimates are considered accurate within a plus or minus six percent range. The depreciation expense is $30,000. The tax rate is 34%. The sale value is estimated at $14 a unit, give or take 5%. The company bases its sensitivity analysis on the expected case scenario.

[A] find out EBIT under the optimistic case scenario?

[B] find out earnings before interest and taxes (EBIT) under the expected case scenario?

[C] find out the operating cash flow for a sensitivity analysis using total fixed costs of $32,000?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M919485

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