Miller Mfg. is analyzing a proposed project. The company expects to sell 15,300

Question

Miller Mfg. is analyzing a proposed project. The company expects to sell 15,300 units, give or take 5 percent. The expected variable cost per unit is $19 and the expected fixed cost is $35,000. The fixed and variable cost estimates are considered accurate within a plus or minus 5 percent range. The depreciation expense is $30,000. The tax rate is 34 percent. The sale price is estimated at $23 a unit, give or take 5 percent.
What is the earnings before interest and taxes under the base case scenario?

Explanation / Answer

D) $17,292

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