Question
Use the following information for the problems 10~13. A Project requires an initial investment of $4,000,000 and is depreciated straight-line to zero salvage over its
Use the following information for the problems 10~13.
A Project requires an initial investment of $4,000,000 and is depreciated straight-line to zero salvage over its 10-year life.
The project produces items that sell for $7,000 each, with variable costs of $5,000 per unit. Fixed costs are $2,000,000 per year.
10. What is the accounting break-even quantity?
11. What is the cash break-even quantity(ignoring taxes)?
12. What is the operating cash flow at the accounting break-even
(ignoring taxes)?
13. What is the DOL at the OCF(in the problem 12) output level?
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