Question
Modern Artifacts can produce keepsakes that will be sold for $84 each. Non-depreciated fixed costs are $940 per year and variable costs are $51 per
Modern Artifacts can produce keepsakes that will be sold for $84 each. Non-depreciated fixed costs are $940 per year and variable costs are $51 per unit.
a. If the project requires an initial investment of $3,120 and is expected to last for 5 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 5 years to a final value of zero, and the discount rate is 13%. (Round your answers to the nearest whole dollar.) Accounting break-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.)
Accounting break-even sales level $ --------
NPV break-even sales level $ ----------
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