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Consider a project to supply Detrolt with 2 0 , 0 0 0 tons of machine screws annually for automobile production. You will need an

Consider a project to supply Detrolt with 20,000 tons of machine screws annually for
automobile production. You will need an initial $3.1 million investment in threading
equipment to get the project started; the project will last for five years. The accounting
department estimates that annual fixed costs will be $925,000 and that varlable costs
should be $185 per ton; accounting will depreclate the Initial fixed asset Investment
straight-IIne to zero over the five-year project life. It also estimates a salvage value of
$400,000 after dismantling costs. The marketing department estimates that the
automakers will let the contract at a selling price of $295 per ton. The engineering
department estimates you will need an initial net working capital investment of
$380,000. You require a return of 13 percent and face a tax rate of 22 percent on this
project.
Calculate the accounting, cash, and financial break-even quantities. (Do not round
Intermedlate calculations and round your answers to the nearest whole number, e.g.,
32.)
Answer is complete but not entirely correct.
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