Question
Ayden's Toys, Incorporated, just purchased a $485,000 machine to produce toy cars. The machine will be fully depreciated by the straight-line method over its
Ayden's Toys, Incorporated, just purchased a $485,000 machine to produce toy cars. The machine will be fully depreciated by the straight-line method over its 7-year economic life. Each toy sells for $21. The variable cost per toy is $6 and the firm incurs fixed costs of $345,000 per year. The corporate tax rate for the company is 25 percent. The appropriate discount rate is 13 percent. What is the financial break-even point for the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Financial break-even point units
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
11th edition
77861752, 978-0077861759
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