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A project requires an initial investment of $10,000, straight-line depreciable to zero over 4 years. The discount rate is 10%. Your tax bracket is 34%
| A project requires an initial investment of $10,000, straight-line | ||||||
| depreciable to zero over 4 years. The discount rate is 10%. Your tax | ||||||
| bracket is 34% and you receive a tax credit for negative earnings in | ||||||
| the year in which the loss occurs. Additional information for variables | ||||||
| with forecast error are shown below. | ||||||
| Base | Lower | Upper | ||||
| Case | Bound | Bound | ||||
| Unit Sales | 3,000 | 2,750 | 3,250 | |||
| Price/unit | $14 | $13 | $16 | |||
| Variable cost/unit | $9 | $8 | $10 | |||
| Fixed costs | $9,000 | $8,500 | $10,000 |
What is the base case accounting break-even point?
|
1083 1500 1800 2300 2237 | ||
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