Accounting Break-Even Point (in units) Price Variable Cost Project per Unit per Unit Fixed Costs Depreciation A 6,250 $54 $98,000 $25,000 B 770 $1,020 $501,000 $100,000 1,950 $22 $14 $4,600 D 1,950 $22 $ 5 $15,000 (Click on the icon in order to copy its contents into a spreadsheet.) a. 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 are above the break-even point, which project would you prefer? Explain why.
Accounting Break-Even Point (in units) Price Variable Cost Project per Unit per Unit Fixed Costs Depreciation A 6,250 $54 $98,000 $25,000 B 770 $1,020 $501,000 $100,000 1,950 $22 $14 $4,600 D 1,950 $22 $ 5 $15,000 (Click on the icon in order to copy its contents into a spreadsheet.) a. 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 are above the break-even point, which project would you prefer? Explain why.
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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Transcribed Image Text:Accounting
Break-Even
Price
Variable Cost
Project
Point (in units)
per Unit
per Unit
Fixed Costs
Depreciation
A
6,250
$54
$98,000
$25,000
B
770
$1,020
$501,000
$100,000
C
1,950
$22
$14
$4,600
D
1,950
$22
$ 5
$15,000
(Click on the icon in order to copy its contents into a spreadsheet.)
a. 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 are above the break-even point, which project would you prefer? Explain why.
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