The Sable Co. is considering the introduction of a new product. Company management has prepared the following estimates related to the project as well as the related range of values, where applicable.
Sales quantity 3,000 ± 5 percent
Sales price $9.00 ± 3 percent
Variable cost per unit $5.00 ± 4 percent
Fixed costs $8,500 ± 2 percent
Depreciation $1,500
Tax rate 34 percent
1. What are the total fixed costs under the best case scenario?
2. What is the projected base case net income? (Round to the nearest whole dollar)
3. What is the projected worst case earnings before interest and taxes? (Round to the nearest whole dollar)
4. What is the projected best case operating cash flow? (Round to the nearest whole dollar)