Question
Modern Artifacts can produce keepsakes that will be sold for $270 each. Nondepreciation fixed costs are $4,800 per year, and variable costs are $250 per
Modern Artifacts can produce keepsakes that will be sold for $270 each. Nondepreciation fixed costs are $4,800 per year, and variable costs are $250 per unit. The initial investment of $12,500 will be depreciated straight-line over its useful life of five years to a final value of zero, and the discount rate is 10%.
e. What is the degree of operating leverage for the firm for the NPV break-even points when the tax rate is 0%
e-2. and when the tax rate is 20%?
Note: Round intermediate calculation to the nearest whole number. Round your answers to 2 decimal places.
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