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- Stinnett Transmissions, Incorporated, has the following estimates for its new gear assembly project: Price = $1,260 per unit; variable cost $480 per unit; fixed costs = $4.99 million; quantity = 89,000 units. Suppose the company believes all of its estimates are accurate only to within ±22 percent. What values should the company use for the four variables given here when it performs its best- case and worst-case scenario analysis? Note: Do not round Intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567. Scenario Unit Sales Unit Price Base case 89,000 $ Unit Variable Cost 1,260 $ Fixed Costs 480 $ 4,990,000 Best case Worst caseStinnett Transmissions, Incorporated, has the following estimates for its new gear assembly project: Price = $1,130 per unit; variable cost = $350 per unit; fixed costs = $4.86 million; quantity = 76,000 units. Suppose the company believes all of its estimates are accurate only to within 116 percent. What values should the company use for the four variables given here when it performs its best- case and worst-case scenario analysis? Note: Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567. Scenario Base case Best case Worst case Unit Sales Unit Price 76,000 $ Unit Variable Cost 350 1,130 S Fixed Costs $4,860,000Stinnett Transmissions, Incorporated, has the following estimates for its new gear assembly project: Price = $1,220 per unit; variable costs = $3.75 million; quantity = 90,000 units. Suppose the company believes all of its estimates are accurate only to within ±15 percent. What values should the company use for the four variables given here when it performs its best-case scenario analysis? What about the worst-case scenario? (Do not round intermediate calculations.) $380 per unit; fixed costs = Units Sales Unit Price Unit Variable Cost Fixed Costs Scenario Base Best Worst
- Stinnett Transmissions, Incorporated, has the following estimates for its new gear assembly project: Price = $ 1,250 per unit; variable cost = $470 per unit; fixed costs $4.98 million; quantity = 88,000 units. Suppose the company believes all of its estimates are accurate only to within \pm 21 percent. What values should the company use for the four variables given here when it performs its best-case and worst-case scenario analysis? Note: Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234, 567.Sloan Transmissions, Inc., has the following estimates for its new gear assembly project: price $2,600 per unit; variable costs $520 per unit; fixed costs = $1.7 million; quantity = 82,000 units. Suppose the company believes all of its estimates are accurate only to within 120 percent. What values should the company use for the four variables given here when it performs its best-case scenario analysis? What about the worst-case scenario? Scenario Base Best Worst Units Sales Unit Price Unit Variable cost Fixed CostsStinnett Transmissions, Incorporated, has the following estimates for its new gear assembly project: Price $1,220 per unit; variable costs $3.75 million; quantity = 90,000 units. Suppose the company believes all of its estimates are accurate only to within ±15 percent. What values should the company use for the four variables given here when it performs its best-case scenario analysis? What about the worst-case scenario? Pls don't copy answer pls
- Hudson Corporation is considering three options for managing its data warehouse: continuing with its own staff, hiring an outside vendor to do the managing, or using a combination of its own staff and an outside vendor. The cost of the operation depends on future demand. The annual cost of each option (in thousands of dollars) depends on demand as follows: If the demand probabilities are 0.2, 0.5, and 0.3, which decision alternative will minimize the expected cost of the data warehouse? What is the expected annual cost associated with that recommendation? Construct a risk profile for the optimal decision in part (a). What is the probability of the cost exceeding $700,000?Southern Goods is analyzing a proposed project using standard sensitivity analysis. The company expects to sell 4,500 units, ±11 percent. The expected variable cost per unit is $13 and the expected fixed costs are $12,000. Cost estimates are considered accurate within a ± 5 percent range. The depreciation expense is $5,000. The sale price is estimated at $22 a unit, ±2 percent. If the company conducts a sensitivity analysis using a variable cost of $12, what will the total variable cost estimate be? $53,625 $53,500 $54,000 $48,060 $59,940Texas Instruments is concerned that the estimated future operating costs of its soon-to-be-purchased equipment may not be very accurate. Let's say, the fixed production costs end up being 15% higher than what the company's research team has estimated, and the variable production costs will on the other hand be 8% lower. Clearly, this will affect the valuation of the project. But to which extent?? To see the extent of the effect on the project's current value, one should perform calculations known as analysis. Multiple Choice break-even scenario O sensitivity O equivalent cost homemade
- Huang Industries is considering a proposed project whose estimatedNPV is $12 million. This estimate assumes that economic conditions will be “average.”However, the CFO realizes that conditions could be better or worse, so she performed ascenario analysis and obtained these results: Calculate the project’s expected NPV, standard deviation, and coefficient of variation.1. What is sensitivity analysis? 2. Perform a sensitvity analysis on the unit sales, salvage value, and WACC for a project. Assume that each of these variables deviates from its base-case, or expected value by plus or minus 10%, 20%, and 30%.The base case value for unit sales is 150,000. Calculate NPV for each case (18 NPV in total), then draw a graph with three lines (one for unit sales, one for salvage value, and one for WACC). At the end, perform a sensitivity analysis for the project (what you have seen, what conclusions you can make?). 3. What is the primary weakness of sensitvity analysis? What are its primary advantages?The Miramar Company is going to introduce one of three new products: a widget, a hummer, or a nimnot. The market conditions (favorable, stable, or unfavorable) will determine the profit or loss the company realizes, as shown in the following payoff table: a. Compute the expected value for each decision and select the best one. b. Develop the opportunity loss table and compute the expected opportunity loss for each product. c. Determine how much the firm would be willing to pay to a market research firm to gain better information about future market conditions.