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6. Randall's Ales & Porters S.A., is considering expanding into Costa Rica. As an incentive, Costa Rica agrees not to charge the company any taxes.
6. Randall's Ales & Porters S.A., is considering expanding into Costa Rica. As an incentive, Costa Rica agrees not to charge the company any taxes. The project has the following estimated data: price = $56 per unit variable costs = $24.08 per unit fixed costs = $5,700 required return = 16 percent initial investment = $11,000 life = three years depreciable life = three years, straight-line. a. What is the accounting break-even quantity? b. What is the cash break-even quantity? C. What is the financial break-even quantity? d. What is the degree of operating leverage at the financial break-even level of output? 6. Randall's Ales & Porters S.A., is considering expanding into Costa Rica. As an incentive, Costa Rica agrees not to charge the company any taxes. The project has the following estimated data: price = $56 per unit variable costs = $24.08 per unit fixed costs = $5,700 required return = 16 percent initial investment = $11,000 life = three years depreciable life = three years, straight-line. a. What is the accounting break-even quantity? b. What is the cash break-even quantity? C. What is the financial break-even quantity? d. What is the degree of operating leverage at the financial break-even level of output
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