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You are considering investing in a company that cultivates abalone for sale to local restaurants. Use the following information: Sales price per abalone = $44.60

You are considering investing in a company that cultivates abalone for sale to local restaurants. Use the following information:

Sales price per abalone = $44.60
Variable costs per abalone = $11.25
Fixed costs per year = $498,000
Depreciation per year = $102,000
Tax rate = 21%

The discount rate for the company is 13 percent, the initial investment in equipment is $918,000, and the projects economic life is 9 years. Assume the equipment is depreciated on a straight-line basis over the projects life and has no salvage value.

a.

What is the accounting break-even level for the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

b.

What is the financial break-even level for the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

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