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Olin transmission, Inc. has the following estimates

Business & Finance
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Olin transmissions, Inc.has the following estimates for its new gear assembly project: price =$2,600 per unit; variable costs =$520 per unit; fixed costs =$1.7 million; quantity=82,000 units. Suppose the company believes all of its estimates are accurate only to within +_ 20 percent. What values should the company use for the four variables given here when it performs its best-case scenario analysis? What about the worst-case scenario?

Apr 27th, 2015

In the best case scenario, price per unit and number of units are plus 20%, variable and fixed costs are less 20%; it's the opposite for the worst case scenario.

Best case: price = 3,120 variable = 416 fixed = 1.36 million quantity = 98,400

Worst case: price = 2,080 variable = 624 fixed = 2.04 million quantity = 65,600

Apr 27th, 2015

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