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A Project Has Base-Case Earnings Before Interest and Taxes of $36,408

Question 10

Multiple Choice

A project has base-case earnings before interest and taxes of $36,408, fixed costs of $42,700, a selling price of $24 a unit, and a sales quantity of 22,000 units. All estimates are accurate within ±2 percent. Depreciation is $16,700. What is the base-case variable cost per unit?


A) $22.16
B) $23.84
C) $19.65
D) $22.23
E) $17.18

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