Smith Brothers has a choice of two projects. Project A has annual fixed costs of $750,000 while project B has Annual Fixed costs of $3m. Project A has depreciation and amortization of $375,000 and project B has depreciation and amortisation of $700,000. The possible projects are for the sale of computer keyboards. These keyboards will sell for $22 each. The variable costs for project A are $16 and $9 for project B. (4 Marks) The EBITDA of project A is $900,000 and the EBIT of Project B is $1.9m. a) Calculate the Cash Flow Cross Over Level of Unit Sales (2 Marks) Answer: b) Calculate the Accounting Cross Over Level of Unit Sales (2 Marks) Answer: c) Calculate the Cash Flow DOL for Project A (1 Mark) Answer: d) Calculate the Accounting DOL for Project A (1 mark) Answer: e) Calculate the Cash Flow DOL for Project B (1 Mark) Answer: f) Calculate the Accounting DOL for Project B (1 Mark) Answer: Smith Brothers has a choice of two projects. Project A has annual fixed costs of $750,000 while project B has Annual Fixed costs of $3m. Project A has depreciation and amortization of $375,000 and project B has depreciation and amortisation of $700,000. The possible projects are for the sale of computer keyboards. These keyboards will sell for $22 each. The variable costs for project A are $16 and $9 for project B. (4 Marks) The EBITDA of project A is $900,000 and the EBIT of Project B is $1.9m. a) Calculate the Cash Flow Cross Over Level of Unit Sales (2 Marks) Answer: b) Calculate the Accounting Cross Over Level of Unit Sales (2 Marks) Answer: c) Calculate the Cash Flow DOL for Project A (1 Mark) Answer: d) Calculate the Accounting DOL for Project A (1 mark) Answer: e) Calculate the Cash Flow DOL for Project B (1 Mark) Answer: f) Calculate the Accounting DOL for Project B (1 Mark)