Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $130. The material cost of a standard diamond is

Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $130. The material cost of a standard diamond is $80. The fixed costs incurred each year for factory upkeep and administrative expenses are $206,000. The machinery costs $1.2 million and is depreciated straight-line over 10 years to a salvage value of zero.

What is the accounting break-even level of sales in terms of the number of diamonds sold?

Note: Do not round intermediate calculations.

What is the NPV break-even level of sales assuming a tax rate of 21%, a 10-year project life, and a discount rate of 12%?

Note: Do not round intermediate calculations. Round your answer up to the nearest whole unit.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image
Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Markets And Institutions

Authors: Anthony Saunders, Marcia Cornett

5th Edition

0078034663, 978-0078034664

More Books

Students also viewed these Finance questions

Question

H ow is a clubs vision put together? AppendixLO1

Answered: 1 week ago

Question

Describe the factors influencing of performance appraisal.

Answered: 1 week ago