Modern Artifacts can produce keepsakes that will be sold for $50 each. Nondepreciation fixed costs are $2,500 per year, and variablecosts 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 ofzero, 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 salesb. NPV break-even level of salesc. Acounting break-even level of salesd. NPV break-even level of salesunitsunitsunitsunits

Accounting break even point=Therefore, the accounting break-even level of sales is 145 units.

Answered: Modern Artifacts can produce keepsakes…

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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900 Islands Co. is interested in purchasing a machine that would improve its operational efficiency. The cost is $200,000 with an estimated residual value of $20,000and a useful life of eight years. Cash inflows are expected to increase by $40,000 a year. The company's minimum rate of return is 10 percent. The present value of $1 for eight years at 10 percent is 0.467, and the present value of an annuity of $1 at 10 percent and eight years is 5.335. The net present value of the project is?
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