Problem:
Automatic Transmissions, Inc. has the following estimates for its new gear assembly project: price= $1070 per unit; variable cost =$290 per unit; fixed costs=$4.8 million; quantity=70,000 units. Suppose the company believes all of its estimates are accurate only to within + or - 15 percent.
Required:
Question: What values should the company use for the four variables given here when it performs its best-case scenario analysis? What about worse case analysis?
Note: Please provide equation and explain comprehensively and give step by step solution.