Question: A project has the following estimated data: price = $94 per unit; variable costs = $37.60 per unit; fixed costs = $5,600; required return =

A project has the following estimated data: price = $94 per unit; variable costs = $37.60 per unit; fixed costs = $5,600; required return = 9 percent; initial investment = $13,000; life = three years. Ignore the effect of taxes.

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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