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Precise Machinery is analyzing a proposed project....

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Question

Precise Machinery is analyzing a proposed project. The company expects to sell 2,140 units, give or take 5 percent. The expected variable cost per unit is $260 and the expected fixed costs are $589,000. Cost estimates are considered accurate within a plus or minus 4 percent range. The depreciation expense is $139,000. The sales price is estimated at $750 per unit, give or take 2 percent. The tax rate is 32 percent. The company is conducting a sensitivity analysis on the sales price using a sales price estimate of $765. What is the operating cash flow based on this analysis? A. $337,975 B. $295,089 C. $86,675 D. $378,836 E. $368,515

 

Paper#7060 | Written in 18-Jul-2015

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