13-9. (Using break-even analysis) (Related to Checkpoint 13.4 on page 457)AccountingBreak-EvenVariable CostProject Point (in units) Price per Unitper UnitFixed Costs DepreciationA6,250$55$100,000$ 25,000B750$1,000$500,000$100,000$ 20$ 202,000$15$ 5,000D2,000$ 5$ 15,000a. Calculate the missing information for each of the above projects.b. Note that Projects C and D share the same accounting break-even. If sales areabove the break-even point, which project do you prefer? Explain why.c. Calculate the cash break-even for each of the above projects. What do the dif-ferences in accounting break-even and cash break-even tell you about the fourprojects?

Break even analysis is the analysis of how the fixed and variable cost affect the firms profit.…

Answered: 13-9. (Using break-even analysis)…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Given , the crossover point between the following locations is 25.000 Al- Riyadh Jidda Fixed Cost $400 000 Variable cost $ 5 $ 7 What is the fixed cost for Jeddah ? Not recognized 450000 $ 350000 $ 400000 $ 500000 $
In each of the following cases, find the unknown variable. Ignore taxes. (Do not round intermediate calculations. Round the unit price and variable cost answer to 2 decimal places. Omit $ sign in your response.) Accounting break-even 98,500 $ 578,310 9,380 Unit price 48 $ 80 Unit variable cost 38 $ 48 Fixed costs. 800,000 4,800,000 360,000 Depreciation $ 980,000 100,000
Compute the Internal Rate of Return (IRR) for the project Purchase Equipment only, given that it falls between 11% and 13%. The PV Factors for 13% are provided below YEAR PV FACTORS (13%) 1 0.8850 2 0.7831 3 0.6931 Additional Info if you need it: ProForma Income Statement Particulars Amount Amount Sales [a] 2800000 x 1.15 3,220,000 Less Cost of Goods Sold 1400000 x 1.15 =1,610,000 Less Selling & Marketing Costs 75000 x 1.15 = 86,250 Less Admin Expenses 25000 x 1.15 = 28750 Less DepreciationExps.[Unchanged] [b] 50,000 1,775,000 EBIT [a-b] [c] 1,445,000 Less Interest [d] 20,000 EBT [c-d] [d] 1,425,000 Less Income Tax at 20% [e] 285,000 Net Income [d-e] [f] 1,140,000 Dividend Pay -out 50% [f/2] [g] 570,000 Addition to Retained Earnings…
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A3 44 Given the following project information, calculate the after-tax operating cash flow (ATOCF) using the four approaches of calculating operating cash flow. Project cost = $950,000 Project life = five years Projected number of units sold per year = 10,000 Projected price per unit = $200 Projected variable cost per unit = 150 Fixed costs per year = $150,000 Required rate of return = 15% Marginal tax rate = 35% Depreciation = Straight-line to zero over five years (ignore half-year rule)
Shelton Company purchased a parcel of land six years ago for $869,500. At that time, the firm invested $141,000 in grading the site so that it would be usable. Since the firm wasn't ready to use the site itself at that time, it decided to lease the land for $52,000 a year. The company is now considering building a warehouse on the site as the rental lease is expiring. The current value of the land is $921,000. What value should be included in the initial cost of the warehouse project for the use of this land? Multiple Choice A. $1,010,500 B. $869,500 C. $1,062,000 D. $921,000 E. SO
According to following information, Number of units produced is 20000. Variable Total Costs Fixed Costs Costs Material used ? in Production 48000 OMR 50000 Labor used in 2500 Production 47500 Production Facilities cost 18000 ? 25000 What will be the estimated cost of 10000 units? Select one: a. OMR 85000 O b. NONE OF THE OPTIONS O c. OMR 73750 O d. OMR 62500
In each of the following cases, calculate the accounting break-even and the cash break- even points. Ignore any tax effects in calculating the cash break-even. (Do not round Intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Case 123 Case 1 2 3 Unit Price $ 2,980 44 8 Unit Varlable Cost $1,640 39 3 Accounting break-even Fixed Costs $ 7,200,000 275,000 5,800 Cash break-even Depreciation $2,900,000 183,000 1,100
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Clarita Contracting builds roads, tunnels, bridges, and other transportation infrastructure. The following are the budgeted costs and time (months) to a given stage of completion for a project to upgrade a bridge to current standards. The project was originally estimated to take 25 months to complete. Also presented are the actual results through the first 11 months of the project. Percentage Complete 0% 4% 8% 12% 16% 20% 24% 28% 32% 36% 40% 44% 48% 52% 56% 60% 64% 68% 72% 76% 80% 84% 88% 92% 96% 100% Cost ($000) Budget 0 213 471 775 1,125 1,520 1,961 2,447 2,979 3,557 4,180 4,849 5,563 6,323 7,129 7,980 8,877 9,819 10,807 11,841 12,920 14,045 15,215 16,431 17,693 19,000 Actual 0 112 266 464 706 990 1,317 1,688 2,102 2,559 3,059 3,063 4,189 4,819 Months to Reach Budget Actual 0 5 7 8 9 10 11 12 13 14 14 15 16 17 18 18 19 20 20 21 22 22 23 24 24 25 0 1 1 2 3 4 4 5 6 7 8 9 10 11
A project has a unit price of $21.98, a variable cost per unit of $8.97, fixed costs of $314,920, and depreciation expense of $38,009. Ignore taxes. What is the accounting break-even quantity? Multiple choice: 26,197.6 28,131.8 29,219.7 29,798.6 26,123.54
Variations in the profit and useful life of the project are inversely related. (a) True (b) False.

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