Question
Modern Artifacts can produce keepsakes that will be sold for $230 each. Nondepreciation fixed costs are $4,000 per year, and variable costs are $210 per
Modern Artifacts can produce keepsakes that will be sold for $230 each. Nondepreciation fixed costs are $4,000 per year, and variable costs are $210 per unit. The initial investment of $10,500 will be depreciated straight-line over its useful life of five years to a final value of zero, and the discount rate is 10%.
What is the accounting break-even level of sales if the firm pays no taxes?
What is the NPV break-even level of sales if the firm pays no taxes?
Note: Do not round intermediate calculations. Round your final answer to the nearest whole number.
What is the accounting break-even level of sales if the firms tax rate is 20%?
What is the NPV break-even level of sales if the firms tax rate is 20%?
Note: Do not round intermediate calculations. Round your final answer to the nearest whole number.
What is the degree of operating leverage for the firm for the NPV break-even points when the tax rate is 0% and when the tax rate is 20%?
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