Ayden's Toys, Incorporated, just purchased a $515,000 machine to produce toy cars. The machine will be fully depreciated by the straight-line method over its 8-year economic life. Each toy sells for $27. The variable cost per toy is $9 and the firm incurs fixed costs of $375,000 per year. The corporate tax rate for the company is 21 percent. The appropriate discount rate is 9 percent. What is the financial break-even point for the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Financial break-even point units
Ayden's Toys, Incorporated, just purchased a $515,000 machine to produce toy cars. The machine will be fully depreciated by the straight-line method over its 8-year economic life. Each toy sells for $27. The variable cost per toy is $9 and the firm incurs fixed costs of $375,000 per year. The corporate tax rate for the company is 21 percent. The appropriate discount rate is 9 percent. What is the financial break-even point for the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Financial break-even point units
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 9P
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