Get correct answer general accounting Modern Artifacts can produce keepsakes that will be sold for $40each. Nondepreciation fixed costs are $600 per year, and variablecosts are $30 per unit. The initial investment of $1,800 will bedepreciated straight-line over its useful life of 6 years to a final valueof zero, and the discount rate is 8%.What is the degree of operating leverage of Modern Artifacts whensales are $4,000? (Do not round intermediate calculations. Roundyour answer to 2 decimal places.)

Step 1: Define Financial and Operating LeverageBoth financial and operating leverage increase the…

Answered: Modern Artifacts can produce keepsakes…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 5P

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Modern Artifacts can produce keepsakes that will be sold for $100 each. Nondepreciation fixed costs are $1,300 per year, and variable costs are $70 per unit. The initial investment of $4,000 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 12%. (For all the requirements, do not round intermediate calculations. Round your answer to the nearest whole number.) b. What is the accounting break-even level of sales if the firm’s tax rate is 30%? a. What is the NPV break-even level of sales if the firm’s tax rate is 30%?
Modern Artifacts can produce keepsakes that will be sold for $100 each. Nondepreciation fixed costs are $1,300 per year, and variable costs are $70 per unit. The initial investment of $4,000 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 12%. (For all the requirements, do not round intermediate calculations. Round your answer to the nearest whole number.) a. What is the accounting break-even level of sales if the firm pays no taxes? b. What is the NPV break-even level of sales if the firm pays no taxes?
Modern Artifacts can produce keepsakes that will be sold for $50 each. Nondepreciation fixed costs are $2.900 per year, and variable costs are $30 per unit. The initial investment of $3,000 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 14%. (For all the requirements, do not round Intermedlate calculations. Round your answer to the nearest whole number.) a. What is the accounting break-even level of sales if the firm pays no taxes? b. What is the NPV break-even level of sales if the firm pays no taxes? c. What is the accounting break-even level of sales if the firm's tax rate is 40%? d. What is the NPV break-even level of sales if the firm's tax rate is 40%?
Modern Artifacts can produce keepsakes that will be sold for $50 each. Nondepreciation fixed costs are $2,500 per year, and variable costs are $30 per unit. The initial investment of $2,000 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 10%. Note: For all the requirements, do not round intermediate calculations. Round your answer up to the nearest whole unit. a. What is the accounting break-even level of sales if the firm pays no taxes? b. What is the NPV break-even level of sales if the firm pays no taxes? c. What is the accounting break-even level of sales if the firm's tax rate is 40%? d. What is the NPV break-even level of sales if the firm's tax rate is 40%? a. Acounting break-even level of sales b. NPV break-even level of sales c. Acounting break-even level of sales d. NPV break-even level of sales units units units units
Modern Artifacts can produce keepsakes that will be sold for $50 each. Nondepreciation fixed costs are $2,500 per year, and variable costs are $30 per unit. The initial investment of $2,000 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 10%.Note: For all the requirements, do not round intermediate calculations. Round your answer up to the nearest whole unit.What is the accounting break-even level of sales if the firm pays no taxes?What is the NPV break-even level of sales if the firm pays no taxes?What is the accounting break-even level of sales if the firm’s tax rate is 40%?What is the NPV break-even level of sales if the firm’s tax rate is 40%?
Modern Artifacts can produce keepsakes that will be sold for $50 each. Nondepreciation fixed costs are $ 1,500 per year, and variable costs are $30 per unit. The initial investment of $2, 000 will be depreciated straight - line over its useful life of 5 years to a final value of zero, and the discount rate is 10%. Note: For all the requirements, do not round intermediate calculations. Round your answer up to the nearest whole unit. What is the accounting break - even level of sales if the firm pays no taxes? What is the NPV break - even level of sales if the firm pays no taxes? What is the accounting break - even level of sales if the firm's tax rate is 40%? What is the NPV break - even level of sales if the firm's tax rate is 40% ?
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Saved Modern Artifacts can produce keepsakes that will be sold for $60 each. Nondepreciation fixed costs are $3,000 per year, and variable costs are $30 per unit. The initial investment of $3,000 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 10%. Note: For all the requirements, do not round intermediate calculations. Round your answer up to the nearest whole unit. a. What is the accounting break-even level of sales if the firm pays no taxes? b. What is the NPV break-even level of sales if the firm pays no taxes? c. What is the accounting break-even level of sales if the firm's tax rate is 30%? d. What is the NPV break-even level of sales if the firm's tax rate is 30%? a. Acounting break-even level of sales b. NPV break-even level of sales c. Acounting break-even level of sales d. NPV break-even level of sales 120 units units units units
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3. Schultz Company is considering purchasing a machine that would cost $478,800 and have a useful life of 5 years. The machine would reduce cash operating costs by $114,000 per year. The machine would have a salvage value of $6,200. Schultz Company prefers a payback period of 3.5 years or less.Required: a. Compute the payback period for the machine. What does this mean? b. Compute the return on average investment (ROI)
What is the firm's degree of leverage?
Dinshaw Company is considering the purchase of a new machine. The invoice price of the machine is $87,306, freight charges are estimated to be $2,620, and installation costs are expected to be $7,370. The annual cost savings are expected to be $14,980 for 11 years. The firm requires a 20% rate of return. Ignore income taxes. What is the internal rate of return on this investment? Internal rate of return % Round to 0 decimal placese

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