New Town Instruments Is Analyzing a Proposed Project

Multiple Choice

New Town Instruments is analyzing a proposed project. The company expects to sell 1,600 units, ±3 percent. The expected variable cost per unit is $220 and the expected fixed costs are $438,000. Cost estimates are considered accurate within a ±2 percent range. The depreciation expense is $64,000. The sales price is estimated at $647 per unit, ±2 percent. What is the sales revenue under the worst-case scenario?

A) $1,086,825
B) $896,201
C) $984,061
D) $1,014,496
E) $932,017