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Hi Tutor, please show me step by step calculation for the below questions: 3 (b). A project has the following estimated data: Price RM57 per

Hi Tutor, please show me step by step calculation for the below questions:

3 (b). A project has the following estimated data:

Price

RM57 per unit

Variable cost

RM32 per unit

Fixed costs

RM9,000

Required return

12%

Initial investment

RM18,000

Life

4 years

Ignore the effect of taxes, calculate;

(i) Accounting break-even quantity.

(4 marks)

Q = FC + D / P v

= Fixed Costs + (RM18,000 /4) / (Sales price per unit Variable costs per unit)

= RM 9,000 + 4,500 / ( 57 32)

= ?

(ii) Cash break-even quantity.

(3 marks)

Q = FC / P v

= ?

(iii) Financial break-even quantity.

(9 marks)

Please include a short paragraph on what happens to the project NPV at the financial breakeven.

(iv) Degree of operating leverage at financial break-even level of output.

(3 marks)

DOL = FC / OCF

= ?

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