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10 5 points Skipped A company is wondering if a new 8-year project (with the relevant information below) is worth it. Each unit can be
10 5 points Skipped A company is wondering if a new 8-year project (with the relevant information below) is worth it. Each unit can be sold for $44.10 $11.00 Each unit can be produced for Additional total fixed costs (i.e., regardless of # of units produced) per year = $478,000 Production equipment can be bought for = $936,000 Depreciation of the production equipment, per year Company's income tax rate = $117,000 = 21% In addition, the discount rate appropriate for the project's level of risk is 13 percent per year. The production equipment follows straight-line depreciation method over the project's 8-year life, and will be worthless at the end of the project. a. In order to break even in the "accounting" sense, the company would need to sell units each year. (Do not round your intermediate calculations and only round your final answer to 2 decimal places, e.g., 32.16.) b. In order to break even in the "financial" sense, the company would need to sell units each year. (Do not round your intermediate calculations and only round your final answer to 2 decimal places, e.g., 32.16.) a. Accounting break-even level units b. Financial break-even level units
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