Question: A project has the following estimated data: price = $89 per unit; variable costs = $33.82 per unit; fixed costs = $5,100; required return =

A project has the following estimated data: price = $89 per unit; variable costs = $33.82 per unit; fixed costs = $5,100; required return = 10 percent; initial investment = $11,000; life = seven years. Ignore the effect of taxes.

Required:

(a)

What is the accounting break-even quantity? (Do not round your intermediate calculations.)

145, 133, 92, 121, 115

(b)

What is the cash break-even quantity? (Do not round your intermediate calculations.)

87,92,74,83,121

(c)

What is the financial break-even quantity? (Do not round your intermediate calculations.)

160,133,120,106,146

(d)

What is the degree of operating leverage at the financial break-even level of output? (Do not round your intermediate calculations.)

1.8759, 1.6595, 1.2266, 3.2572, 1.0101

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