The Can-Do Co. 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 $7 and the expected fixed cost is $36,000. The fixed and variable cost estimates are considered accurate within a plus or minus 6 percent range. The depreciation expense is $30,000. The tax rate is 34 percent. The sale price is estimated at $14 a unit, give or take 5 percent. What is the earnings before interest and taxes under the BEST case scenario?
Under Best Case -
Sales = 12,000 x (1+4%) = 12480 units
Variable Cost per unit ...
This solution provides clear, step by step calculations for determining EBIT from the given information.