1) Webster Iron Works started a new project las one alternative that best completes the statement or answers the question. operati that level over its lifetime. Given this, you know that the project ng at its accounting break-even level of output and is now expected to continue at t year. As it turns out, the project has been A) will never pay back B) has a zero net present value. c) is lowering the total net income of the firm. D) is operating at a higher level than if it were operating at its financial break-even level. E) is operating at a higher level than if it were operating at its cash break-even level 2) Sun Brite has a new pair of sunglasses it is evaluating. The company expects to sell 6400 2) pairs of sunglasses at a price of $159 each and a variable cost of $111 each. The equipment necessary for the project will cost $335,000 and will be depreciated on a straight-line basis over the 7-year life of the project. Fixed costs are $250,000 per year and the tax rate is 40 percent. How sensitive is the operating cash flow to a $1 change in variable costs per pairs of sunglasses? A) S3456 B) $3840 C)-$3840 D)-$4267 E)-$3456 3) Gateway Communications is considering a project with an initial fixed assets cost of S1.59 million that will be depreciated straight-line to a zero book value over the 10-year life of the project. At the end of the project the equipment will be sold for an estimated $236,000. The project will not change sales but will reduce operating costs by $385,500 per year. The tax rate is 40 percent and the required return is 11.1 percent. The project will require $50,000 in net working capital, which will be recouped when the project ends. What is the project's NPV? A) S188,898 B)S156,350 C)$196,454 D) S203,003 E)$149,552 4) 38,200, fixed costs of $84,600, and total sales of $211,000 at the accounting break-even level. The variable costs per unit are estimated at $9.64. What is the accounting break-even level of production? 4) Wexford Industrial Supply is considering a new project with estimated depreciation of A) 7,248 units B) 6,871 units c) 10,415 units D) 9,149 units E) 9,333 units