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Northern Woods is considering two methods of production for a new product. The first method A will require fixed assets costing $450,000 that will be

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Northern Woods is considering two methods of production for a new product. The first method A will require fixed assets costing $450,000 that will be depreciated straight-line to zero over the project life, annual fixed costs of $316,000, and variable costs per unit of $8.64. The second method B will require fixed assets costing $790.000. annual fixed costs of $211,000, and variable costs per unit of $6.57. The new product will sell for $20 a unit, have a life of 3 years, a discount rate of 16 percent, and a tax rate of 35 percent Which method of production should be implemented according to financial break-even quantity? (Hint: in the lecture, we only derive QBE when tax.. Now you need to derive QBE with tax.) Method A Method B The two methods are indifferent Cannot determine

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