Question
AXIA Inc. has a new six-year project that produces high-end backpacks with an initial investment equals to $60,000. The estimated selling price equals $85 per
AXIA Inc. has a new six-year project that produces high-end backpacks with an initial investment equals to $60,000. The estimated selling price equals $85 per unit and variable costs equal $60 per unit. Fixed costs equal to $26,000. Investors do require a 14% return.
1. Calculate the cash break-even quantity? Interpret your answer.
2. Calculate the accounting break-even quantity? Interpret your answer.
3. Calculate the financial break-even quantity? Interpret your answer.
4. What is the degree of operating leverage for this project? Assuming that sales are estimated at $170,000.
Please show all steps and answer quickly
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