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A project has the following estimated data: price = $800 per unit; variable costs = $650 per unit; fixed costs = $900,000; required return =

A project has the following estimated data: price = $800 per unit; variable costs = $650 per unit; fixed costs = $900,000; required return = 8%; initial investment = $5,000,000; salvage value = $50,000; life = 14 years.

  1. What is the financial break-even quantity?
  2. What is the operating cash flow at the financial break-even quantity?
  3. What is the degree of operating leverage at the financial break-even quantity?

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