How could you address this concern for ati

Assignment Help Financial Accounting

Reference no: EM133433906

Question: Scenario Analysis
The RI Department of Transportation is researching the pricing strategy relating to a local company called Auto Transmissions Inc (ATI). ATI has the following estimates for its new gear assembly project: price = $960 per unit; variable cost = $350 per unit; fixed costs = $3.6 million; quantity = 55,000 units. Suppose the company believes all of its estimates are accurate only to within +/- 15%. What values should the company use for the four variables given here when it performs its best-case scenario analysis? What about the worse-case scenario analysis?

Sensitivity Analysis
For the company in the previous question, suppose you are most concerned about the impact of its price estimate on the project's profitability. How could you address this concern for ATI? Describe how you would calculate your answer. What values would you use for the other forecast variables?

Reference no: EM133433906

Questions Cloud

Developing an software app to address the situation : Describe PESTEL analysis for health insurance company to fight Type 2 Diabetes issues and developing an software APP to address the situation.

How this guide led to project improvements and success : Explain the purpose of this decision and how this guide led to project improvements and success.

What is the appropriate accounting treatment for each : Identify the applicable accounting exchange rate or if an error correction applies. Explain what is the appropriate accounting treatment for each situation.

Discuss how the sarbanes-oxley act has increased : Discuss how the Sarbanes-Oxley Act has increased the importance of internal control to top managers of a company?

How could you address this concern for ati : How could you address this concern for ATI? Describe how you would calculate your answer. What values would you use for the other forecast variables?

What is the irr for the gold mine : The Utah Mining Corporation is set to open a gold mine near Provo, Utah. According to the treasurer, Monty Goldstein, "This is a golden opportunity."

What is the difference in the total interest paid between : What is the difference in the total interest paid between the two different? maturities? The difference in the total interest paid between the two different

What will your monthly payment be : What will your monthly payment be? How much will you have paid to the credit card company over the 5 years? How much total interest did you pay?

Which project do you think is riskier : Which project do you think is riskier? Why? What is your final recommendation to Rodriguez?

User Account

All Pages