Miller Mfg. is analyzing a proposed project. The company expects to sell 13,000

Question

Miller Mfg. is analyzing a proposed project. The company expects to sell 13,000 units, give or take 4 percent. The expected variable cost per unit is $6.00 and the expected fixed cost is $31,000. The fixed and variable cost estimates are considered accurate within a plus or minus 5 percent range. The depreciation expense is $29,000. The tax rate is 34 percent. The sale price is estimated at $13.00 a unit, give or take 3 percent.
What is the earnings before interest and taxes under the base case scenario?

Explanation / Answer

$45,519

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