What is the earnings before interest and taxes

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The Orange Co. is analysing a proposed project. The company expects to sell 12,000 units, give or take 4%. The expected variable cost per unit is $7 and the expected fixed cost is $36,000. The fixed and variable cost estimates are considered accurate within a plus or minus 6% range. The depreciation expense is $30,000. The tax rate is 34%. The sale price is estimated at $14 a unit, give or take 5%. The company bases its sensitivity analysis on the expected case scenario.

Problem 1: What is the earnings before interest and taxes under the expected case scenario?

Problem 2: What is the earnings before interest and taxes under the optimistic case scenario?

Reference no: EM133012192

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