Question
Modern Artifacts can produce keepsakes that will be sold for $120 each. Nondepreciation fixed costs are $1,800 per year, and variable costs are $100 per
Modern Artifacts can produce keepsakes that will be sold for $120 each. Nondepreciation fixed costs are $1,800 per year, and variable costs are $100 per unit. The initial investment of $5,000 will be depreciated straight-line over its useful life of five years to a final value of zero, and the discount rate is 10%. What is the accounting break-even level of sales if the firm pays no taxes? What is the NPV break-even level of sales if the firm pays no taxes? (Do not round intermediate calculations. Round your final answer to the nearest whole number.) What is the accounting break-even level of sales if the firms tax rate is 20%? What is the NPV break-even level of sales if the firms tax rate is 20%?
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