A project has the following estimated data price $89 per unit variable costs $48 06 per unit fixed costs $7,800 required return 10 percent initial investment $12,000 life six years Ignore the effect of taxes Required (a) 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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Question: A project has the following estimated data: price = $89 per unit; variable costs = $48.06 per unit; fixed costs = $7,800; required return =

A project has the following estimated data: price = $89 per unit; variable costs = $48.06 per unit; fixed costs = $7,800; required return = 10 percent; initial investment = $12,000; life = six years. Ignore the effect of taxes.

Required:

(a)	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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