HiLo Mfg Is Analyzing a Project with Anticipated Sales of 12,500

Multiple Choice

HiLo Mfg. is analyzing a project with anticipated sales of 12,500 units, ±2 percent. The variable cost per unit is $13, ± 2 percent, and the expected fixed costs are $237,000, ±1 percent. The sales price is estimated at $69 a unit, ±3 percent. The depreciation expense is $68,000 and the tax rate is 22 percent. What is the earnings before interest and taxes under the base-case scenario?

A) $368,500
B) $421,000
C) $395,000
D) $414,900
E) $427,500