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Calculate the financial break even (factoring in taxes) by pen and paper using this information show your work cess/lessonbuilder/item/27923959/group/cgfxgxzgdszsdsdzgfffffzzfzSdDSDSSdzfdzdfzdgzhxgfzfsDzdsD/Ch.%2011.p. - Consider the following project: A

Calculate the financial break even (factoring in taxes) by pen and paper using this information show your work image text in transcribed
cess/lessonbuilder/item/27923959/group/cgfxgxzgdszsdsdzgfffffzzfzSdDSDSSdzfdzdfzdgzhxgfzfsDzdsD/Ch.%2011.p. - Consider the following project: A new product requires an initial investment of $5 million and will be depreciated to an expected salvage of zero over 5 years. - The price of the new product is expected to be $25,000, and the variable cost per unit is $15,000. - The fixed cost is $1 million. Required return is 18% Tax rate is 21% - What is the accounting break-even point each year? Depreciation = 5,000,000 / 5 = 1,000,000 . Q = (1,000,000 + 1,000,000)/(25,000 - 15,000) = 200 units 11.45 cess/lessonbuilder/item/27923959/group/cgfxgxzgdszsdsdzgfffffzzfzSdDSDSSdzfdzdfzdgzhxgfzfsDzdsD/Ch.%2011.p. - Consider the following project: A new product requires an initial investment of $5 million and will be depreciated to an expected salvage of zero over 5 years. - The price of the new product is expected to be $25,000, and the variable cost per unit is $15,000. - The fixed cost is $1 million. Required return is 18% Tax rate is 21% - What is the accounting break-even point each year? Depreciation = 5,000,000 / 5 = 1,000,000 . Q = (1,000,000 + 1,000,000)/(25,000 - 15,000) = 200 units 11.45

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