a Calculate the missing information for each of the above projects The price per unit for Project A is $75 55" (Round to the nearest cent) The vanable cost per unit for Project B is $ 130.82 (Round to the nearest cent) The depreciation for Project C is $ 15300 (Round to the nearest dollar) The fixed costs for Project D is $ 23000 (Round to the nearest dollar) b. Note that Projects C and D share the same accounting break even if salds are above the break even point, which project would you prefer? Explain why (Select from t We should prefer Project D because the contribution margin (Price per unit-Variable cost per unit) of project D is more which causes overall proft to increase e. Calculate the cash break-even for each of the above projects The cash break even for Project Ais 4,915 units The cash break-even for Project B is 600 units The cash break-even for Project C is 470 units (Round to the nearest whole number) (Round to the nearest whole number) (Round to the nearest whole number) The cash break-even for Project Dis 1,150 units (Round to the nearest whole number) What do the differences in accounting and cash break-even tell you about the four projects? (Select from the drop-down menus) The accounting break-even point tells us the level of sales necessary to cover our total fixed and variable operating costs where total faed costs include both cash Exed cosis and depreciation expense (which is not a cash expense for the period), while the cash break-even point tells us the level of sales where we have covered our cash fixed costs ignoring depreciation) and as a result our cash flow is zero down menua
a Calculate the missing information for each of the above projects The price per unit for Project A is $75 55" (Round to the nearest cent) The vanable cost per unit for Project B is $ 130.82 (Round to the nearest cent) The depreciation for Project C is $ 15300 (Round to the nearest dollar) The fixed costs for Project D is $ 23000 (Round to the nearest dollar) b. Note that Projects C and D share the same accounting break even if salds are above the break even point, which project would you prefer? Explain why (Select from t We should prefer Project D because the contribution margin (Price per unit-Variable cost per unit) of project D is more which causes overall proft to increase e. Calculate the cash break-even for each of the above projects The cash break even for Project Ais 4,915 units The cash break-even for Project B is 600 units The cash break-even for Project C is 470 units (Round to the nearest whole number) (Round to the nearest whole number) (Round to the nearest whole number) The cash break-even for Project Dis 1,150 units (Round to the nearest whole number) What do the differences in accounting and cash break-even tell you about the four projects? (Select from the drop-down menus) The accounting break-even point tells us the level of sales necessary to cover our total fixed and variable operating costs where total faed costs include both cash Exed cosis and depreciation expense (which is not a cash expense for the period), while the cash break-even point tells us the level of sales where we have covered our cash fixed costs ignoring depreciation) and as a result our cash flow is zero down menua
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
Related questions
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Transcribed Image Text:(Related to Checkpoint 13.4) (Break-even analysis)
Accounting
Break-Even
Point (in units)
6,230
740
1,980
1,980
Project
A
Price
per Unit
Variable Cost
per Unit
$54
$1,030
$20
$20
B
C
D
(Click on the iconin order to copy its contents into a spreadsheet.)
Fixed Costs
$102,000
$495,000
$4,700
$14
$8
Depreciation
$27,000
$98,000
$16,000
Transcribed Image Text:(Related to Checkpoint 13.4) (Break-even analysis)
Accounting
Break-Even
Point (in units)
6,230
740
1,980
1,980
Project
A
Price
per Unit
Variable Cost
per Unit
$54
$1,030
$20
$20
B
C
D
(Click on the iconin order to copy its contents into a spreadsheet.)
Fixed Costs
$102,000
$495,000
$4,700
$14
$8
Depreciation
$27,000
$98,000
$16,000
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