A company is considering a new project with the following estimates: Price per Unit = $125; Variable Costs per Unit = $40; Annual Fixed Costs = $350,000; Annual Number of Units Sold = 3,000. The company believes all estimates are accurate only to within ±12%. Assume you were peforming scenario analysis and computing the proposed project's expected annual operating cash flows under the worst-case scenario. What amount would you use in your analysis for total annual cash outflow from variable costs? Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit any commas and the $ sign in your response. For example, an answer of $1,000.50 should be entered as 1000.50.

A company is considering a new project with the following estimates: Price per Unit = $125; Variable Costs per Unit = $40; Annual Fixed Costs = $350,000; Annual Number of Units Sold = 3,000. The company believes all estimates are accurate only to within ±12%. Assume you were peforming scenario analysis and computing the proposed project's expected annual operating cash flows under the worst-case scenario. What amount would you use in your analysis for total annual cash outflow from variable costs? Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit any commas and the $ sign in your response. For example, an answer of $1,000.50 should be entered as 1000.50.

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Description: A company is considering a new project with the following estimates:Price per Unit = $125; Variable Costs per Unit = $40; Annual FixedCosts = $350,000; Annual Number of Units Sold = 3,000. Thecompany believes all estimates are accurate only to withi

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter11: Cash Flow Estimation And Risk Analysis

Section: Chapter Questions

Problem 8P

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