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Financial Break-Even Niko has purchased a brand new machine to produce its High Flight line of shoes. The machine has an economic life of five
Financial Break-Even Niko has purchased a brand new machine to produce its High Flight line of shoes. The machine has an economic life of five years. The depreciation schedule for the machine is straight-line with no salvage value. The machine costs $$75,000. The sales price per pair of shoes is $50, while the variable cost is $14. $195,000 of fixed costs per year are attributed to the machine. Assume that the corporate tax rate is 34 percent and the appropriate discount rate is 8 percent. 7. Calculate the accounting break-even number of units sold/year that will make EBIT-0 Calculate the financial break-even number of units sold/year that will make NPV -0 a. Net Income 0 or b
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