Question: Given: Price = $61.50 per unit; variable cost = $23.25 per unit; fixed cost = $397,500 per year; initial outlay = $750,000; project life =

Given: Price = $61.50 per unit; variable cost = $23.25 per unit; fixed cost = $397,500 per year; initial outlay

= $750,000; project life = 4 years. Assume a discount rate of 12% and straight-line depreciation and that there is no corporate tax. (a) What is the accounting break-even point? Round your answer to the next higher whole

number. (b) What is the cash break-even point? Round your answer to the next higher whole number. (c)

What is the financial break-even point? Round your answer to the next higher whole number. (d) Suppose the

firm is operating at the financial break-even level of output. What will the new operating cash flow (OCF) be if

sales increase by 21%.

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