Miller Mfg. is analyzing a proposed project. The company expects to sell 8,000 units per...
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Miller Mfg. is analyzing a proposed project. The company expects to sell 8,000 units per year, but has estimated that unit volume could be as much as 5% higher or lower than that. The company is pretty certain about the estimated sales price of $64 per unit.
Expected Variable Cost is $10 per unit, but realistically could be either 10% higher or lower. Fixed Costs are estimated to be constant at $290,000 a year, and Depreciation expense will be $68,000 per year. The relevant tax rate is 20%. Assume each year is the same.
What are the Best Case assumptions for unit sales and Variable Cost per unit?
Group of answer choices
7,600 units; $ 9/unit
7,600 units; $11/unit
8,000 units; $10/unit
8,400 units; $9/unit
8,400 units; $11/unit
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