Break-Even and Taxes This problem concerns the effect of taxes on the various break-even measures. a. Show that, when we consider taxes, the general relationship

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Break-Even and Taxes This problem concerns the effect of taxes on the various break-even measures.

a. Show that, when we consider taxes, the general relationship between operating cash flow, OCF, and sales volume, Q, can be written as:

b. Use the expression in part (a) to the cash, accounting, and financial break-even points for the Wet way sailboat example in the chapter. Assume a 38 percent tax rate.

c. In part (b), the accounting break-even should be the same as before. Why? Verify this algebraically.

OCF - TXD 1-T FC +