Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $130. The material cost of a standard diamond is $80. The fixed costs incurred each year for factory upkeep and administrative expenses are S$206,000. The machinery costs $1.2 million and is depreciated straight-line over 10 years to a salvage value of zero. What is the accounting break-even level of sales in terms of the number of diamonds sold? Note: Do not round intermediate calculations. 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 12%? Note: Do not round intermediate calculations. Round your answer up to the nearest whole unit.
Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $130. The material cost of a standard diamond is $80. The fixed costs incurred each year for factory upkeep and administrative expenses are S$206,000. The machinery costs $1.2 million and is depreciated straight-line over 10 years to a salvage value of zero. What is the accounting break-even level of sales in terms of the number of diamonds sold? Note: Do not round intermediate calculations. 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 12%? Note: Do not round intermediate calculations. Round your answer up to the nearest whole unit.
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
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Transcribed Image Text:Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $130. The material cost of a standard diamond is $80. The fixed costs
incurred each year for factory upkeep and administrative expenses are $206,000. The machinery costs $1.2 million and is depreciated straight-line over 10 years to a salvage
value of zero.
What is the accounting break-even level of sales in terms of the number of diamonds sold?
Note: Do not round intermediate calculations.
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 12%?
Note: Do not round intermediate calculations. Round your answer up to the nearest whole unit.
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