Acounting break-even level of sales units

Assignment Help Financial Management
Reference no: EM131317808

Modern Artifacts can produce keepsakes that will be sold for $60 each. Nondepreciation fixed costs are $2,000 per year, and variable costs are $30 per unit. The initial investment of $5,000 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 12%.

a. What is the accounting break-even level of sales if the firm pays no taxes? (Do not round intermediate calculations. Round your answer to the nearest whole number.)

  Acounting break-even level of sales units  

b. What is the NPV break-even level of sales if the firm pays no taxes? (Do not round intermediate calculations. Round your answer to the nearest whole number.)

  NPV break-even level of sales units  

c. What is the accounting break-even level of sales if the firm’s tax rate is 40%? (Do not round intermediate calculations. Round your answer to the nearest whole number.)

  Acounting break-even level of sales units  

d. What is the NPV break-even level of sales if the firm’s tax rate is 40%? (Do not round intermediate calculations. Round your answer to the nearest whole number.)

  NPV break-even level of sales units

Reference no: EM131317808

Questions Cloud

What is beta of your portfolio : Portfolio Beta You own $1,300 of City Steel stock that has a beta of 1.56. You also own $5,600 of Rent-N-Co (beta = 1.86) and $4,600 of Lincoln Corporation (beta = .96). What is the beta of your portfolio (closest to)?
What is the present value of your prize at discount rate : You just won the magazine sweepstakes and opted to take unending payments. The first payment will be $21,500 and will be paid one year from today. Every year thereafter, the payments will increase by 2.5 percent annually. What is the present value of..
What is average cost per burger when the firm produces : In a slow year, Deutsche Burgers will produce 2.0 million hamburgers at a total cost of $4.1 million. In a good year, it can produce 5.0 million hamburgers at a total cost of $5.6 million. What are the fixed costs of hamburger production? What is the..
What is the average cash flow you will receive from the mine : A silver mine can yield 16,000 ounces of silver at a variable cost of $34 per ounce. The fixed costs of operating the mine are $56,000 per year. In half the years, silver can be sold for $50 per ounce; in the other years, silver can be sold for only ..
Acounting break-even level of sales units : Modern Artifacts can produce keepsakes that will be sold for $60 each. Nondepreciation fixed costs are $2,000 per year, and variable costs are $30 per unit. What is the accounting break-even level of sales if the firm pays no taxes? What is the NPV b..
Break-even sales diamonds per year : Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $120. The materials cost for a standard diamond is $60. What is the accounting break-even level of sales in terms of number of diamonds sold?
What is the beta of your portfolio : You own $13,920 of Olympic Steel stock that has a beta of 3.11. You also own $16,820 of Rent-a-Center (beta = 1.68) and $27,260 of Lincoln Educational (beta = 0.72). What is the beta of your portfolio?
Methods involve contracting out for services : Capital Healthplans Inc. is evaluating two different methods for providing home health services to its members. Both methods involve contracting out for services, and the health outcomes and revenues are not affected by the method chosen. What is eac..
Compute the expected return and standard deviation : Following are four economic states, their likelihoods, and the potential returns: Economic State Probability Return Fast growth 0.30 71 % Slow growth 0.40 17 Recession 0.19 –18 Depression 0.11 –50 Compute the expected return and standard deviation.

Reviews

Write a Review

 

Financial Management Questions & Answers

  What is annual ordering cost of the post card inventory

Post Card Depot, an large retailer of post cards, orders 7,952,250 post cards per year from its manufacturer. Post Card Depot plans on ordering post card 15 times over the next year. Post Card Depot receives the same number of post cards each time it..

  What is the dollar amount of costly trade credit the firm

Taylor Textbooks Inc. buys on terms of 1/12, net 59 days. It does not take discounts, and it typically pays on time, 59 days after the invoice date. Net purchases amount to $550,000 per year. On average, what is the dollar amount of costly trade cred..

  The interest was compounded continuously

Shawna just turned 21 and currently has no investments. She plans to invest $5,500 at the end of each of the next 8 years, starting with her 22nd birthday. The rate of return on her investment is 4% per year, compounded monthly. What will be the bala..

  What will its current price per share be

If it expects to keep the same payout ratio, and to earn 20% on future investments forever, what will its current price per share be? Assume that the cost of capital is 15%.

  My business is a salon that serves men and womens

Given your profit and loss projection from last week, do you anticipate needing to borrow money for any reason? Keep in mind the seasonality of your company. You might make a lot of money in the winter, and have essentially no business in the summer ..

  Calculate claytons profile margin and debt ratio

Assume you are given the following relationship for the Clayton Corporation: Calculate Clayton’s profile margin and debt ratio.

  What will be the required rate of return for that instrument

If the real rate of interest is 3%, expected inflation is 2%, the default risk premium is 6%, the liquidity premium is 2%, and the maturity premium is 2% for an instrument, what will be the required rate of return for that instrument?

  Would it be the availability of credit

What is tipping theory? how would you apply it to any part of our economy? Most important, where does it start? For instance, if you apply the theory to the auto industry, then what would tip new car purchases? Would it be the availability of credit?..

  The bonds will mature and be redeemed at face value

Twenty $1,000 municipal bonds are offered for sale at $18,000. The bond coupon rate is 6% per year payable semiannually. The bonds will mature and be redeemed at face value 5 years from now. If you purchase the bonds, the first premiums will be recei..

  A firm is financing its growth with retained earnings

A firm is financing its growth with retained earnings. It is retaining 80 percent of its annual earnings. The firm's historic return on equity is 16 percent, a figure that is expected to continue into the future. How much will earnings grow over the ..

  The aqua liquid assets money market mutual fund

The Aqua Liquid Assets Money Market Mutual Fund has a NAV of $1 per share. During the year, the assets held by this fund appreciated by 1.1 percent. If you had invested $15,000 in this fund at the start of the year, how many shares would you own at t..

  What is the market value of the company debt

Bennington Industrial Machines issued 145,000 zero coupon bonds six years ago. The bonds originally had 30 years to maturity with a yield to maturity of 7 percent. What is the price of the bonds? What is the market value of the company's debt?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd