What is the financial break-even quantity?
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The accounting breakeven quantity is 7,440 units. The cash breakeven quantity is 6,800 units. Life of the project is five years. Annual fixed costs are $170,000. The variable cost is $40 per unit. The required return is 12 percent. Ignoring the effect of taxes. What is the financial break-even quantity?
a. 8,767 uni
b. 7,687 uni
c. 6,787 uni
d. 7,688 uni
tstststs88 units
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- A project requires an investment of $900 today. It has sales of $1,100 per year forever. Costs will be $600 the first year and increase by 20% per year. Ignoring taxes calculate the NPV of the project at 12% discount rate.A. $65.00B. $57.51 C. $100.00D. Cannot be calculated as g>r.The IRR of the project is 12% and the present value of operating cash flow is $22,000. The life of the project is 6-years and fixed is $2,000 per year. Compute the financial breakeven unit if the contribution margin is $20. а. 367 units b. 368 units с. 268 units d. None of the aboveAn investment project is expected to yield $10,000 in annual revenues, will incur $2,000 in fixed costs per year, and requires an initial investment of $5,000. Given a cost of goods sold of 60% of sales and ignoring taxes, what is the payback period in years? * A. 2.50 B. 2.00 C. 5.00 D. 1.25
- A project produces annual net income of $15,250, $18,700, and $21,750 over three years, respectively. The initial cost of the project is $315,200. This cost is depreciated straight-line to a zero book value over three years. What is the average accounting rate of return? 17.67% 12.18% 11.78%Consider the following project. Costs: $100,000, at time t = 0. $45,000, at time t = 4. Income: Three payments of $10,000, each one year apart, with the first payment at time t = 1. Four payments of $60,000, each paid every 4 years apart, with the first payment at time t = 4.5. Assuming that the project is financed by a loan which is subject to interest of 6% per annum (effective), and that interest is earned in an investment fund at 3% per annum (effective), determine the accumulated value of this project at time t = 20. You may assume that debt (the loan) is to repaid prior to money being invested in the investment fund. Give your answer to the nearest dollar. Show all working.Stenson, Inc., imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available. Year Cash Flow A Cash Flow B 0 –$ 49,000 –$ 94,000 1 19,000 21,000 2 25,400 26,000 3 21,000 33,000 4 7,000 246,000 What is the payback period for each project? Project A: _____ years Project B: _____ years
- Stenson, Inc., imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available. Cash Flow(A) -$ 54,000 21,500 28,400 23,500 9,500 Cash Flow(B) -$ 99,000 23,500 28,500 30,500 241.000 Year What is the payback period for each project? Project A years Project B years Which, if either, project(s) should the company accept? -234Olinick Corporation is considering a project that would require an investment of $322,000 and would last for 8 years. The incremental annual revenues and expenses generated by the project during those 8 years would be as follows (Ignore income taxes.): Sales. Variable expenses Contribution margin Fixed expenses: Salaries Rents Depreciation Total fixed expenses Net operating income $ 284,000 18,000 266,000 29,000 42,000 37,000 108,000 $ 158,000 The scrap value of the project's assets at the end of the project would be $19,000. The cash inflows occur evenly throughout the year. The payback period of the project is closest to: (Round your answer to 1 decimal place.)Stenson, Inc., imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available. Year Cash Flow A Cash Flow B -$58,000 -$103,000 23,500 30,800 25,500 11,500 25,500 30,500 28,500 237,000 1 2 What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Project A years Project B years Which, if either, project(s) should the company accept?
- Stenson, Inc., imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available. Year Cash Flow A Cash Flow B O -$60,000 -$ 105,000 24,500 32,000 26,500 12,500 26,500 31,500 27,500 235,000 What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Project A Project B years years -23 42. Calculating Payback An investment project provides cash inflows of $865 per year for eight years. What is the project payback period if the initial cost is $3,100? What if the initial cost is $4,300? What if it is $7,900? 3. Calculating Payback Stenson, Inc., imposes a payback cutoff of three vearsThe accounting breakeven quantity is 7,440 units. The cash breakeven quantity is 6,800 units. Life of the project is five years. Annual fixed costs are $170,000. The variable cost is $40 per unit. The required return is 12 percent. Ignoring the effect of taxes. What is the financial break-even quantity?
