Modern Artifacts can produce keepsakes that will be sold for

Modern Artifacts can produce keepsakes that will be sold for $80 each. Nondepreciation fixed costs are $1,000 per year, and variable costs are $60 per unit. The initial investment of $3,000 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 10%.

a. What is the accounting break-even level of sales if the firm pays no taxes?

b. What is the NPV break-even level of sales if the firm pays no taxes?

c. What is the accounting break-even level of sales if the firm's tax rate is 35%?

d. What is the NPV break-even level of sales if the firm's tax rate is 35%?

Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...

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