Precise Machinery is analyzing a proposed project.The company expects to sell 2,300 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 $129,000.The sales price is estimated at $750 per unit,plus or minus 3 percent.What is the sales revenue under the worst case scenario?
A)$1,686,825
B)$1,496,250
C)$1,589,588
D)$1,593,500
E)$1,620,675

Question

Quizplus · Accepted Answer

Sales_{Worst case} = (2,300 × 0.95) × ($750 × .97) = $1,589,588

Precise Machinery Is Analyzing a Proposed Project