The Alfonso Company Is Analyzing a Project with Expected Sales

Multiple Choice

The Alfonso Company is analyzing a project with expected sales of 4,000 units, give or take 5 percent. The expected variable cost per unit is $9 and the expected total fixed costs are $17,000. Cost estimates are considered accurate within a plus or minus 2 percent range. The depreciation expense is $3,000. The sale price is estimated at $18 a unit, give or take 5 percent. Sensitivity analysis is based on the most likely scenario.

What is the sales revenue under the worst case scenario?

A) $64,980
B) $68,400
C) $71,820
D) $72,610
E) $75,600