7. SolarGreen just started a project to produce and sell solar panels at a unit price...

Transcribed Image Text:

7. SolarGreen just started a project to produce and sell solar panels at a unit price of $1,000 over the next ten years. The variable cost is $600 per panel and the fixed cost is $100,000 each year. The initial investment on this project is $500,000 with straight-line depreciation, and the tax life of the fixed assets ends at the end of the project. The project needs $50,000 net working capital every year. The tax rate is 40% and the required return is 15%. What is the accounting and cash breakeven of this project? A. 250, 167 B. 375, 167 C. 250, 125 D. 375, 125 E. 250, 375 7. SolarGreen just started a project to produce and sell solar panels at a unit price of $1,000 over the next ten years. The variable cost is $600 per panel and the fixed cost is $100,000 each year. The initial investment on this project is $500,000 with straight-line depreciation, and the tax life of the fixed assets ends at the end of the project. The project needs $50,000 net working capital every year. The tax rate is 40% and the required return is 15%. What is the accounting and cash breakeven of this project? A. 250, 167 B. 375, 167 C. 250, 125 D. 375, 125 E. 250, 375

Answer rating: 100% (QA)

Calculating Accounting and Cash Breakeven for SolarGreen Project Accounting Breakeven Contribution M... View the full answer