Problem:
Stellar Plastics is analyzing a proposed project. The company expects to sell 12,000 units, give or take 4 percent. The expected variable cost per unit is $6.00 and the expected fixed cost is $36,000. The fixed and variable cost estimates are considered accurate within a plus or minus 5 percent range. The depreciation expense is $31,000. The tax rate is 34 percent. The sale price is estimated at $15.00 a unit, give or take 5 percent.
Required:
Question: What is the operating cash flow for a sensitivity analysis using total fixed costs of $32,000?
- 45000
- 25700
- 29700
- 76000
- 60700
Note: Please explain comprehensively and give step by step solution.