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Stephenie Fashions is considering an expansion project with estimated fixed costs of $127,000, The initial cost is $169,000, to be depreciated at the straight line
Stephenie Fashions is considering an expansion project with estimated fixed costs of $127,000, The initial cost is $169,000, to be depreciated at the straight line method over the project's life. The variable cost per unit is $41.08, and an estimated sales price is $79.90 per unit. The rate of return is 13.5% and the tax is 21%. The project has a life of 10 years. 1) How many units must the firm sell to break even on a cash basis? (Assume there is no tax) (3 pts) 2) How many units must the firm sell on a financial break-even basis? (Assume there is no tax) (4 pts) 3) How many units must the firm sell to break even on an accounting basis? ( 3 pts)
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