Answered step by step
Verified Expert Solution
Question
1 Approved Answer
L.J.s Toys Inc. just purchased a $405,000 machine to produce toy cars. The machine will be fully depreciated by the straight-line method over its five-year
L.J.s Toys Inc. just purchased a $405,000 machine to produce toy cars. The machine will be fully depreciated by the straight-line method over its five-year economic life. Each toy sells for $25. The variable cost per toy is $11, and the firm incurs fixed costs of $283,000 each year. The corporate tax rate for the company is 34 percent. The appropriate discount rate is 12 percent. What is the financial break-even point for the project? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started