Question: A project has the following estimated data: Price = $48 per unit; variable costs = $32 per unit; fixed costs = $20,500; required return =

A project has the following estimated data: Price = $48 per unit; variable costs = $32 per unit; fixed costs = $20,500; required return = 8 percent; initial investment = $36,000; life = six years. Assume straight line depreciation. a. Ignoring the effect of taxes, what is the accounting break-even quantity? b. What is the cash break-even quantity? c. What is the financial break-even quantity? d. What is the degree of operating leverage at the financial break-even level of output?

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