Reference no: EM132850988

Problems -

1. Leopard Machinery is analyzing a proposed project. The company expects to sell 2,300 units, give or take 4 percent. The expected cash variable cost per unit is $260 and the expected fixed costs (not including depreciation) are $589,000. Cost estimates are considered accurate within a plus or minus 5 percent range. The depreciation expense is $129,000. The sales price is estimated at $750 per unit, plus or minus 6 percent. What is the sales revenue under the worst-case scenario? What is the operating cash flow at worst-case sales revenue?

2. Bobcat Industrial Supply is considering a new project with estimated depreciation of $46,000, fixed costs of $39,000, and total sales of $487,000. The variable costs per unit are estimated at $21.00. What is the accounting brea k-even level of production?

3. The Jaguar Works is considering an expansion project with estimated annual fixed costs of $74,000 (not including depreciation), depreciation of $38,500, variable costs per unit of $18.60 and an estimated sales price of $27.50 per unit. How many units must the firm sell to break-even on a cash basis?

4. A company is considering a project with a cash break-even point of 22,600 units. The selling price is $30 a unit, the variable cost per unit is $16, and depreciation is $16,000. What is the projected amount of fixed costs?