Question
Project Accounting Break-Even Point (in units) Price per Unit Variable Cost per Unit Fixed Costs Depreciation A 6,290 $53 $99,000 $26,000 B 750 $1,020 $503,000
| Project | Accounting Break-Even Point (in units) | Price per Unit | Variable Cost per Unit | Fixed Costs | Depreciation | ||
|---|---|---|---|---|---|---|---|
| A | 6,290 | $53 | $99,000 | $26,000 | |||
| B | 750 | $1,020 | $503,000 | $98,000 | |||
| C | 1,950 | $22 | $13 | $5,000 | |||
| D | 1,950 | $22 | $ 7 | $17,000 | |||
a.Calculate the missing information for each of the above projects.
b.Note that Projects C and D share the same accounting break-even. If sales are above the break-even point, which project would you prefer? Explain why.
c.Calculate the cash break-even for each of the above projects. What do the differences in accounting and cash break-even tell you about the four projects?
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Contemporary Issues In Behavioral Finance
Authors: Simon Grima
1st Edition
1787698823, 978-1787698826
