Question
Modern Artifacts can produce keepsakes that will be sold for $80 each. Nondepreciation fixed costs are $2,800 per year, and variable costs are $40 per
Modern Artifacts can produce keepsakes that will be sold for $80 each. Nondepreciation fixed costs are $2,800 per year, and variable costs are $40 per unit. The initial investment of $5,000 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 12%.
a. What is the accounting break-even level of sales if the firm pays no taxes? (Do not round intermediate calculations. Round your answer to the nearest whole number.) Acounting break-even level of sales units
b. What is the NPV break-even level of sales if the firm pays no taxes? (Do not round intermediate calculations. Round your answer to the nearest whole number.) NPV break-even level of sales units
c. What is the accounting break-even level of sales if the firms tax rate is 30%? (Do not round intermediate calculations. Round your answer to the nearest whole number.) Acounting break-even level of sales units
d. What is the NPV break-even level of sales if the firms tax rate is 30%? (Do not round intermediate calculations. Round your answer to the nearest whole number.) NPV break-even level of sales units
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