Martinez, Incorporated, has purchased a brand new machine to produce its High Flight line of shoes. The machine has an economic life of 6 years. The depreciation schedule for the machine is straight-line with no salvage value. The machine costs $612,000. The sales price per pair of shoes is $90, while the variable cost is $39. Fixed costs of $310,000 per year are attributed to the machine. The corporate tax rate is 25 percent and the appropriate discount rate is 10 percent. What is the financial break-even point? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16) Financial break-even point units
Martinez, Incorporated, has purchased a brand new machine to produce its High Flight line of shoes. The machine has an economic life of 6 years. The depreciation schedule for the machine is straight-line with no salvage value. The machine costs $612,000. The sales price per pair of shoes is $90, while the variable cost is $39. Fixed costs of $310,000 per year are attributed to the machine. The corporate tax rate is 25 percent and the appropriate discount rate is 10 percent. What is the financial break-even point? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16) Financial break-even point units
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:Martinez, Incorporated, has purchased a brand new machine to produce its High Flight
line of shoes. The machine has an economic life of 6 years. The depreciation schedule
for the machine is straight-line with no salvage value. The machine costs $612,000. The
sales price per pair of shoes is $90, while the variable cost is $39. Fixed costs of
$310,000 per year are attributed to the machine. The corporate tax rate is 25 percent
and the appropriate discount rate is 10 percent. What is the financial break-even point?
(Do not round intermediate calculations and round your answer to 2 decimal places,
e.g., 32.16)
Financial break-even point
units
4
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