The Quick Producers Co

Multiple Choice

The Quick Producers Co. is analyzing a proposed project. The company expects to sell 10,000 units, give or take 5 percent. The expected variable cost per unit is $6 and the expected fixed cost
Is $29,000. The fixed and variable cost estimates are considered accurate within a plus or minus 4
Percent range. The depreciation expense is $25,000. The tax rate is 34 percent. The sale price is
Estimated at $13 a unit, give or take 6 percent.
What is the earnings before interest and taxes under the base case scenario?

A) $10,560
B) $16,000
C) $22,440
D) $41,000
E) $66,000