Question: A project has the following estimated data: Price = $90 per unit Variable Cost = $41.40 per unit Fixed Cost = $ 7 800 Required

A project has the following estimated data:

Price = $90 per unit

Variable Cost = $41.40 per unit

Fixed Cost = $ 7 800

Required return = 11%

Initial investment = $14 000

Life = 5 years

Ignore the effect of taxes

Questions:

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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