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Mocktober Clothing is considering a new project to sell a unique annual hoodie for each of the next 5 years. All costs associated with annual
Mocktober Clothing is considering a new project to sell a unique annual hoodie for each of the next 5 years. All costs associated with annual changes are integrated into the variable and fixed costs. Moctober will sell hoodies for $50 each and estimate a variable cost of production per hoodie at $25 each. Fixed costs will be $10,000 annually. Cost of the machinery to produce the hoodies will be $5,000, depreciated straight-line over the course of 5 years ( $1,000 per year). The operating cash flow necessary for the project to have an NPV of $0 would be $25,000. What is the quantity needed to reach accounting break-even? 300 hoodies 400 hoodies 440 hoodies 600 hoodies In Question 2, what OCF would be required in order to reach accounting breakeven? $1,000 $5,000 $10,000 $11,000
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