Info

Price per unit

$ 2,500

$ 2,375

$ 2,625

Variable cost per unit

$ 1,500

$ 1,425

$ 1,575

Fixed cost per year

$200,000

$190,000

$210,000

Depreciation is $150,000 per year; knowing this, we can calculate the cash flows under each scenario. Remember that we assign high costs and low prices and volume for the worst-case and just the opposite for the best-case scenario.

Scenario

Unit Sales

Unit Price

Unit Variable Cost

Fixed Costs

Cash Flow

Base case

0 0

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