quantity = 82,000 units. Suppose the company believes all of its estimates are accurate only to within ±20 percent. What values should the company use for the four variables given here when it performs its best-case and worst-case scenario analysis? (Do not round intermediate calculations and enter your answers in dollars, not million, rounded to the nearest whole number, e.g., 1,234,567.)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Automatic Transmissions, Inc., has the following estimates for its new gear assembly
project: price = $1,190 per unit; variable cost = $410 per unit; fixed costs $4.92 million;
quantity = 82,000 units. Suppose the company believes all of its estimates are accurate
only to within ±20 percent. What values should the company use for the four variables
given here when it performs its best-case and worst-case scenario analysis? (Do not
round intermediate calculations and enter your answers in dollars, not million,
rounded to the nearest whole number, e.g., 1,234,567.)
Scenario
Base case
Best case
Worst case
Unit Sales
Unit Price
82,000 $
98,400
65,600
1,190
1,428
952
Unit Variable Cost
$
410
=
Fixed Costs
$ 4,920,000
Transcribed Image Text:Automatic Transmissions, Inc., has the following estimates for its new gear assembly project: price = $1,190 per unit; variable cost = $410 per unit; fixed costs $4.92 million; quantity = 82,000 units. Suppose the company believes all of its estimates are accurate only to within ±20 percent. What values should the company use for the four variables given here when it performs its best-case and worst-case scenario analysis? (Do not round intermediate calculations and enter your answers in dollars, not million, rounded to the nearest whole number, e.g., 1,234,567.) Scenario Base case Best case Worst case Unit Sales Unit Price 82,000 $ 98,400 65,600 1,190 1,428 952 Unit Variable Cost $ 410 = Fixed Costs $ 4,920,000
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