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Wettway Sailboat Corporation is considering whether to launch its new Margo-class sailboat. The selling price will be $47,000 per boat. The variable costs will be
Wettway Sailboat Corporation is considering whether to launch its new Margo-class sailboat. The selling price will be $47,000 per boat. The variable costs will be about half that, or $26,000 per boat, and fixed costs will be $525,000 per year. The total investment needed to undertake the project is $3,700,000. This amount will be depreciated straight-line to zero over the 5-year life of the equipment. The salvage value is zero, and there are no working capital consequences. Wettway has a required return of 17 percent on new projects. OCF-TcXD FC + 1-TC P-V Q: Use the above expression to find the cash, accounting, and financial break-even points for Wettway Sailboat. Assume a tax rate of 22 percent. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Cash break-even Accounting break-even Financial break-even
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