Modern Artifacts can produce keepsakes that will be sold for $100 each. Non-depreciated fixed costs are...
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Modern Artifacts can produce keepsakes that will be sold for $100 each. Non-depreciated fixed costs are $1,200 per year and variable costs are $80 per unit. a. If the project requires an initial investment of $3,120 and is expected to last for 5 years and the firm pays no taxes, what are the accounting and NPV break-even levels of sales? The initial investment will be depreciated straight-line over 5 years to a final value of zero, and the discount rate is 13%. (Round your answers to the nearest whole dollar.) Accounting break-even sales level $ NPV break-even sales level $ b. How do your answers change if the firm's tax rate is 40%? (Round your answers to the nearest whole dollar.) Accounting break-even sales level $ NPV break-even sales level $ Modern Artifacts can produce keepsakes that will be sold for $100 each. Non-depreciated fixed costs are $1,200 per year and variable costs are $80 per unit. a. If the project requires an initial investment of $3,120 and is expected to last for 5 years and the firm pays no taxes, what are the accounting and NPV break-even levels of sales? The initial investment will be depreciated straight-line over 5 years to a final value of zero, and the discount rate is 13%. (Round your answers to the nearest whole dollar.) Accounting break-even sales level $ NPV break-even sales level $ b. How do your answers change if the firm's tax rate is 40%? (Round your answers to the nearest whole dollar.) Accounting break-even sales level $ NPV break-even sales level $
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Answer rating: 100% (QA)
a To calculate the accounting breakeven sales level we need to determine the total fixed costs and the contribution margin Total fixed costs Nondeprec... View the full answer
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0078034640
7th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
Posted Date:
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