Time-Adjusted Cost-Volume-Profit Analysis with Income Taxes Honeydukes Treat Shop is considering the desirability of producing a new chocolate candy called Pleasure Bombs. Before purchasing the new equipment required to manufacture Pleasure Bombs, Neville Long, the shop's proprietor performed the following analysis: Unit selling price $1.98 Variable manufacturing and selling costs 1.73 Unit contribution margin $0.25 Annual fixed costs Depreciation (straight-line for 4 years) $19,000 Other (all cash) 45,000 Total $64,000 Annual break-even sales volume = $64,000 / $0.25 = 256,000 units Because the expected annual sales volume is 160,000 units, Long decided to undertake the production of Pleasure Bombs. This required an immediate investment of $87,000 in equipment that has a life of four years and no salvage value. After four years, the production of Pleasure Bombs will be discontinued. With a 40 percent tax rate and a 8 percent time value of money, determine the annual unit sales required to break even on a time-adjusted basis. Assume straight-line depreciation is used to determine tax payments. Round UP to the nearest unit. I have tried the answer as 292,621 and 292,622 and this is not correct

CHEGG currently has the following below which when submitted shows to be incorrect. Can someone retry doing it?

Ans:- Pre tax required return = (8*1.40)=11.20%

Let sales be x units

so Break even sales equation will be :

=> 87,000= (0.25x-45000)*PVAF(11.2%,4) What does PVAF mean?

=> 87000/3.09 =0.25-45000

=> x=292621.35 Units

Break Even Sales =x = 292621.35 Units