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All the answers I am putting for Cash break even is showing wrong. Wettway Sailboat Corporation is considering whether to launch its new Margo-class sailboat.
All the answers I am putting for Cash break even is showing wrong.
Wettway Sailboat Corporation is considering whether to launch its new Margo-class sailboat. The selling price will be $26,000 per boat. The variable costs will be about half that, or $13,000 per boat, and fixed costs will be $600,000 per year. The Base Case: The total investment needed to undertake the project is $2,300,000. This amount will be depreciated straight-line to zero over the five-year life of the equipment. The salvage value is zero, and there are no working capital consequences. Wettway has a 20 percent required return on new projects. Use the above expression to find cash, accounting and financial break-even points for Wettway Sailboat. Assume a tax rate of 38 percent. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Cash break-even Accounting break-even Financial break-even 46.15 8 81.54 119.89Step by Step Solution
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