Question
Modern Artifacts can produce keepsakes that will be sold for $80 each. Nondepreciation fixed costs are $1,200 per year, and variable costs are $60 per
Modern Artifacts can produce keepsakes that will be sold for $80 each. Nondepreciation fixed costs are $1,200 per year, and variable costs are $60 per unit. The initial investment of $3,000 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 10%. (Do not round intermediate calculations. Round your answer to the nearest whole number.)
a. What is the accounting break-even level of sales if the firm pays no taxes? Acounting break-even level of sales _______units
b. What is the NPV break-even level of sales if the firm pays no taxes? NPV break-even level of sales ______units
c. What is the accounting break-even level of sales if the firms tax rate is 35%? Acounting break-even level of sales ______units
d. What is the NPV break-even level of sales if the firms tax rate is 35%? NPV break-even level of sales ______units
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