9 10 points eBook Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $140. The material cost of a standard diamond is $40. The fixed costs incurred each year for factory upkeep and administrative expenses are $210,000. The machinery costs $1.8 million and is depreciated straight-line over 10 years to a salvage value of zero. a. What is the accounting break-even level of sales in terms of the number of diamonds sold? Note: Do not round intermediate calculations. b. What is the NPV break-even level of sales assuming a tax rate of 21%, a 10-year project life, and a discount rate of 14%? Note: Do not round intermediate calculations. Round your answer up to the nearest whole unit. a. Break-even sales b. Break-even sales Print 3,900 diamonds per year diamonds per year References Check my work
9 10 points eBook Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $140. The material cost of a standard diamond is $40. The fixed costs incurred each year for factory upkeep and administrative expenses are $210,000. The machinery costs $1.8 million and is depreciated straight-line over 10 years to a salvage value of zero. a. What is the accounting break-even level of sales in terms of the number of diamonds sold? Note: Do not round intermediate calculations. b. What is the NPV break-even level of sales assuming a tax rate of 21%, a 10-year project life, and a discount rate of 14%? Note: Do not round intermediate calculations. Round your answer up to the nearest whole unit. a. Break-even sales b. Break-even sales Print 3,900 diamonds per year diamonds per year References Check my work
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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Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $140. The material cost of a
standard diamond is $40. The fixed costs incurred each year for factory upkeep and administrative expenses are $210,000. The
machinery costs $1.8 million and is depreciated straight-line over 10 years to a salvage value of zero.
a. What is the accounting break-even level of sales in terms of the number of diamonds sold?
Note: Do not round intermediate calculations.
b. What is the NPV break-even level of sales assuming a tax rate of 21%, a 10-year project life, and a discount rate of 14%?
Note: Do not round intermediate calculations. Round your answer up to the nearest whole unit.
a. Break-even sales
b. Break-even sales
Print
3,900 diamonds per year
diamonds per year
References
Check my work
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