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Determine the earnings before interest and taxes

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Question - Southern Goods is analyzing a proposed project using standard sensitivity analysis. The company expects to sell 4,500 units, ±11 percent. The expected variable cost per unit is $13 and the expected fixed costs are $12,000. Cost estimates are considered accurate within a ± 5 percent range. The depreciation expense is $5,000. The sale price is estimated at $22 a unit, ±2 percent.

The company is conducting a sensitivity analysis on the sales price using a sales price estimate of $18. Using this value, determine the earnings before interest and taxes?

Reference no: EM133008053

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