Sloan Transmissions, Inc. has the following estimates for its new gear assembly

Question

Sloan Transmissions, Inc. has the following estimates for its new gear assembly project: Price $1,700/unit, variable costs $480, fixed cost $4.1 million, quantity 95,000 units. Suppose management thinks every number is accurate within +/- 15%.

Using the above information and Toolkit – Forecasting Sensitivity, Scenario) answer the following questions:

Question 19 (1 point)

What is the best possible gross profit given the above information?

Question 19 options:

$67,493,750

$111,800,000

$165,524,750

Cannot be determined.

$67,493,750

$111,800,000

$165,524,750

Cannot be determined.

Explanation / Answer

Gross profit = units [price -Variable cost ]-fixed cost

        = 95000[1700-480 ] -4,100,000

        = $ 111,800,000

correct option is "B"

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