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What is the degree of operating leverage at the accounting break-even point? You are considering a new product launch. The project will cost $2,050,000, have
What is the degree of operating leverage at the accounting break-even point?
You are considering a new product launch. The project will cost $2,050,000, have a 4-year life, and have no salvage value; depreciation is straight-line to 0. Sales are projected at 170 units per year; price per unit will be $26,000; variable cost per unit will be $16,000; and fixed costs will be $560,000 per year. The required return on the project is 15%, and the relevant tax rate is 30%
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