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Please Use easy way to solve it. Thanks. Wettway Sailboat Corporation is considering whether to launch its new Margo-class sailboat. The selling price will be
Please Use easy way to solve it. Thanks.
Wettway Sailboat Corporation is considering whether to launch its new Margo-class sailboat. The selling price will be $51,000 per boat. The variable costs will be about half that, or $30,000 per boat, and fixed costs will be $565,000 per year. The total investment needed to undertake the project is $4,100,000. This amount will be depreciated straight-line to zero over the 6-year life of the equipment. The salvage value is zero, and there are no working capital consequences. Wettway has a required return of 12 percent on new projects. FC + Q= OCF-TexD 1-Tc P-V Use the above expression to find the cash, accounting, and financial break-even points for Wettway Sailboat. Assume a tax rate of 21 percent. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. Cash break-even Accounting break-even Financial break-even 26.90 59.44 78.36Step by Step Solution
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