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Wettway Sailboat Corporation is considering whether to launch its new Margo-class sailboat. The selling price will be $49,000 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 $49,000 per boat. The variable costs will be about half that, or $28,000 per boat, and fixed costs will be $545,000 per year. The total investment needed to undertake the project is $3,900,000. This amount will be depreciated straight-line to zero over the 7-year life of the equipment. The salvage value is zero, and there are no working capital consequences. Wettway has a required return of 19 percent on new projects. OCP-TcXD FC + 1-TC P- Q Use the above expression to find the cash, accounting, and financial break-even points for Wettway Sailboat. Assume a tax rate of 24 percent. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. Cash break-even Accounting break-even Financial break-even 17.57 25.95 X 83.52
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