Question
5. A project has the following estimated data: price = $54 per unit; variable costs = $36 per unit; fixed costs = $19,300; required return
5. A project has the following estimated data: price = $54 per unit; variable costs = $36 per unit; fixed costs = $19,300; required return = 12%; initial investment = $26,800; life = 4 years. Ignoring the effect of taxes, what is the accounting break-even quantity? What is the cash break-even quantity? What is the financial break-even quantity? What is the degree of operating leverage at the financial break-even level of output? - I need some clarification on calculating the Financial Break even, I understand the other components that this question is asking to solve but I do not understand was "OCF" or OCF * is and how to calculate it.
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