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Please Help Wettway Sailboat Corporation is considering whether to launch its new Margo-class sailboat. The selling price will be $45,000 per boat. The variable costs
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Wettway Sailboat Corporation is considering whether to launch its new Margo-class sailboat. The selling price will be $45,000 per boat. The variable costs will be about half that, or $22, 500 per boat, and fixed costs will be $1,000,000 per year. The Base Case: The total investment needed to undertake the project is $3, 600,000. This amount will be depreciated straight-line to zero over the five-year life of the equipment. The salvage value is zero, and there are no working capital consequences. Wettway has a 10 percent required return on new projects. Q = FC + OCF - T times D/1 - T/p - v Use the above expression to find cash, accounting and financial break-even points for Wettway Sailboat. Assume a tax rate of 38 percent. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)Step by Step Solution
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