Question
Modern Artifacts can produce keepsakes that will be sold for $71 each. Non-depreciated fixed costs are $920 per year and variable costs are $47 per
Modern Artifacts can produce keepsakes that will be sold for $71 each. Non-depreciated fixed costs are $920 per year and variable costs are $47 per unit.
a.If the project requires an initial investment of $2,850 and is expected to last for 8 years and the firm pays no taxes, what are the accounting and NPV break-even levels of sales? The initial investment will be depreciated straight-line over 8 years to a final value of zero, and the discount rate is 8%.(Round your answers to the nearest whole dollar.)
Accountingbreak-even sales level$?
NPV break-even sales level$?
b.How do your answers change if the firm's tax rate is 40%?(Round your answers to the nearest whole dollar.)
Accountingbreak-even sales level$?
NPV break-even sales level$?
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