Question
Modern Artifacts can produce keepsakes that will be sold for $70 each. Nondepreciation fixed costs are $2,000 per year, and variable costs are $35 per
Modern Artifacts can produce keepsakes that will be sold for $70 each. Nondepreciation fixed costs are $2,000 per year, and variable costs are $35 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 10%.
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.)
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.)
c.What is the accounting break-even level of sales if the firm's tax rate is 40%?(Do not round intermediate calculations. Round your answer to the nearest whole number.)
d.What is the NPV break-even level of sales if the firm's tax rate is 40%?(Do not round intermediate calculations. Round your answer to the nearest whole number.)
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Fundamental Managerial Accounting Concepts
Authors: Thomas P Edmonds, Philip R Olds
9th Edition
1259969509, 9781259969508
