Question
Modern Artifacts can produce keepsakes that will be sold for $60 each. Nondepreciation fixed costs are $2,500 per year, and variable costs are $30 per
Modern Artifacts can produce keepsakes that will be sold for $60 each. Nondepreciation fixed costs are $2,500 per year, and variable costs are $30 per unit. The initial investment of $4,000 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 12%. (For all the requirements, do not round intermediate calculations. Round your answer to the nearest whole number.) a. What is the accounting break-even level of sales if the firm pays no taxes? b. What is the NPV break-even level of sales if the firm pays no taxes? c. What is the accounting break-even level of sales if the firms tax rate is 30%? d. What is the NPV break-even level of sales if the firms tax rate is 30%?
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