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QIV.) Numeric Problem - NPV Break-Even Analysis GIPTA is planning to create agendas for 2022 which will be sold for $80 per unit. The production
QIV.) Numeric
Problem - NPV Break-Even Analysis GIPTA is planning to create agendas for 2022 which will be sold for $80 per unit. The production requires an initial investment of $2,000 which will be depreciated straight-line during its 5-year useful life to a final value of zero. Production fixed costs are assumed to be $1,700 and have no depreciation; and the variable costs are predicted to be $60 per agenda. Assume that the discount rate is 12%. (For all the requirements, do not round intermediate calculations. Round your answer to the nearest whole number.) a. Calculate the accounting break-even level of sales. Assume that GIPTA pays no taxes. b. Calculate the NPV break-even level of sales. Assume that GIPTA pays no taxes, c. Calculate the accounting break-even level of sales. Assume that GIPTA pays 35% tax. d. Calculate the NPV break-even level of sales. Assume that GIPTA pays 35% tax. a Acounting break-even level of sales b. NPV break even level of sales c. Acounting break even level of sales d. NPV break oven level of sales units units units units Step by Step Solution
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