Given that you have nearly finished BA 7020, your manager and the big box co. gives you the following information about a prospective 8- year project. the initial fixed assets costing $1,800,000, annual fixed cost of $1,006,800, variable cost per unit of $173.60, a she's price per unit of$289, a discount rate of 14 percent, and a tax rate of 22 percent. The asset will be depreciated straight- line to zero over the life of the project. the manager asks you to 

1. Compute the accounting break-even sales quantity. 

2. compute the financial break-even sales quantity. if you expect to sell 12,000 units every year will you accept the project and why?

3. Explain to your manager in words why calculating accounting break-even sales quantity and financial break-even sales quantity are important.

Answer rating: 100% (QA)

1 To compute the accounting breakeven sales quantity we need to find the level of sales that would result in zero net income or a breakeven point in a... View the full answer