Question: A project has the following estimated data: Price = $60 per unit; variable costs = $37 per unit; fixed costs = $21,500; required return =

A project has the following estimated data: Price = $60 per unit; variable costs = $37 per unit; fixed costs = $21,500; required return = 12 percent; initial investment = $18,000; life = three years. a. Ignoring the effect of taxes, what is the accounting break-even quantity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the cash break-even quantity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the financial break-even quantity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What is the degree of operating leverage at the financial break-even level of output? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) X Answer is complete but not entirely correct. a. 1,195.65 b. Accounting break-even quantity Cash break-even quantity Financial break-even quantity 934.78 C. 1,260.92 d. DOL 3,869.000
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
