We are evaluating a project that costs $822,600, has a nine-year life, and has no salvage value. Assume that depreclation Is straight-line to zero over the life of the project. Sales are projected at 75,000 units per year. Price per unit is $53, varlable cost per unit is $37, and fixed costs are $755,000 per year. The tax rate is 22 percent, and we require a return of 9 percent on this project. a-1.Calculate the accounting break-even polnt. (Do not round Intermediate calculations and round your answer to the nearest whole number, e.g., 32.) a- What is the degree of operating leverage at the accounting break-even polnt? (Do 2. not round Intermedlate calculations and round your answer to 3 decimal places, e.g., 32.161.) b-1.Calculate the base-case cash flow and NPV. (Do not round Intermedlate calculations. Round your cash flow answer to the nearest whole number, e.g., 32 Round your NPV answer to 2 decimal places, e.g., 32.16.) quantitysold? (Do not round
We are evaluating a project that costs $822,600, has a nine-year life, and has no salvage value. Assume that depreclation Is straight-line to zero over the life of the project. Sales are projected at 75,000 units per year. Price per unit is $53, varlable cost per unit is $37, and fixed costs are $755,000 per year. The tax rate is 22 percent, and we require a return of 9 percent on this project. a-1.Calculate the accounting break-even polnt. (Do not round Intermediate calculations and round your answer to the nearest whole number, e.g., 32.) a- What is the degree of operating leverage at the accounting break-even polnt? (Do 2. not round Intermedlate calculations and round your answer to 3 decimal places, e.g., 32.161.) b-1.Calculate the base-case cash flow and NPV. (Do not round Intermedlate calculations. Round your cash flow answer to the nearest whole number, e.g., 32 Round your NPV answer to 2 decimal places, e.g., 32.16.) quantitysold? (Do not round
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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