Question
A project has the following estimated data: Price = $50 per unit; variable costs = $32 per unit; fixed costs = $14,000; required return =
A project has the following estimated data: Price = $50 per unit; variable costs = $32 per unit; fixed costs = $14,000; required return = 10 percent; initial investment = $20,000; life = four years. |
a. | Ignoring the effect of taxes, what is the accounting break-even quantity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) | |||||||||||||||||||
b. | What is the cash break-even quantity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) | |||||||||||||||||||
c. | What is the financial break-even quantity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) | |||||||||||||||||||
d. | What is the degree of operating leverage at the financial break-even level of output? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)
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