Question: A project has the following estimated data: Price=$50 per unit Variable Cost=$30 per unit Fixed Cost =$22,000 Required return=10% Initial Investment=$32,000 Life of the project=4

 A project has the following estimated data: Price=$50 per unit Variable

A project has the following estimated data: Price=$50 per unit Variable Cost=$30 per unit Fixed Cost =$22,000 Required return=10% Initial Investment=$32,000 Life of the project=4 years Salvage value=0 a) Ignoring the effect of the taxes, what is the financial break-even quantity? b) What is the degree of operating leverage at the financial break-even quantity? c) If sales increase by 5%, how much will the operating cash flow be

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