A project has the following estimated data: price = $85 per unit; variable costs = $46.75 per unit; fixed costs = $5,600; required return = 14 percent; initial investment = $10,000; life = three years. Ignore the effect of taxes.

1. What is the accounting break-even quantity?

2. What is the cash break-even quantity?

3. What is the financial break-even quantity?

4. What is the degree of operating leverage at the financial break-even level of output?

Answer rating: 100% (QA)

1 Accounting break even quantityFixed costsales price per unitvaria... View the full answer