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 Base case 89,000 $ Best case Worst case Unit Price Unit Variable Cost Fixed Costs 480 $ 4,990,000 1,260 $

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 Base case 89,000 $ Best case Worst case Unit Price Unit Variable Cost Fixed Costs 480 $ 4,990,000 1,260 $

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter5: Probability: An Introduction To Modeling Uncertainty

Section: Chapter Questions

Problem 29P: The Siler Construction Company is about to bid on a new industrial construction project. To...

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Texas 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
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