1.

Gamma Inc. has a new four-year project that produces high-end reading glasses with an initial investment equals to $42,000. The estimated selling price equals $75 per unit and variable costs equal to $45 per unit. Fixed costs equal to $25,000. Investors do require a 13% return.

1. Calculate the cash break-even quantity? Interpret your answer.

2. Calculate the accounting break-even quantity? Interpret your answer.

3. Calculate the financial break-even quantity? Interpret your answer.

4. What is the degree of operating leverage for this project? Assuming that sales are estimated at $150,000.

2. CCC Inc. is considering a 3-year project with an initial cost of $745,000. The project will not directly produce any sales but will reduce operating costs by $205,000 a year. The equipment is depreciated straight-line to a zero book value over the life of the project. At the end of the project the equipment will be sold for an estimated $30,000. The tax rate is 35%. The project will require $35,000 in extra inventory for spare parts and accessories. Calculate the NPV. Should this project be implemented if CCC requires an 9% rate of return? Why or why not?

Can you please explain with full steps