Break-even point strictly on the basis of cash expenditures

Assignment Help Financial Management
Reference no: EM131302643

Cash break-even analysis [LO2]

Air Purifier Inc. computes its break-even point strictly on the basis of cash expenditures related to fixed costs. Its total fixed costs are $2,460,000, but 20 percent of this value is represented by depreciation. Its contribution margin (price minus variable cost) for each unit is $42. How many units does the firm need to sell to reach the cash break-even point? (Round your answer to the nearest whole number.)

Cash break-even point units

Reference no: EM131302643

Questions Cloud

Cost controls in health care reimbursement models : Search the Internet for two articles about the methods of cost controls in health care reimbursement models and how the methods have affected the availability of services. Using the articles as resources, write at least two pages, addressing the f..
Explain how you will implement the decision made : Evaluate the options for solving the problem - Decide on the best option for solving the problem and explain how you will implement the decision made and reflect on whether this option was the most effective.
Program design reduces cost and satisfies learners : Question: Identify the design elements whish help ensure that participants learned and put it into practice. Explain how these design elements encourage learning and transfer.
What are some contemporary management theories : What are some contemporary management theories? What are the main concepts of those theories? how are they the same and how are they different? which if any of the historic management theories are they closely related to?
Break-even point strictly on the basis of cash expenditures : Air Purifier Inc. computes its break-even point strictly on the basis of cash expenditures related to fixed costs. Its total fixed costs are $2,460,000, but 20 percent of this value is represented by depreciation. Its contribution margin (price minus..
Discuss possible reasons for the discrepancy : How does the value that you computed in (1) compare to the $8 million offer the company received from National Building Supply Co.? Discuss possible reasons for the discrepancy.
Compute cost of retained earnings : Murray Motor Company wants you to calculate its cost of common stock. During the next 12 months, the company expects to pay dividends (D1) of $2.00 per share, and the current price of its common stock is $40 per share. Compute the cost of retained ea..
Different environment for public leadership : From the weekly readings and e-Activity, suggest three (3) strategies that a public leader could use in order to do the following: persuade other governmental departments to work collaboratively to reduce financial burdens, increase sufficiency in..
Explain why limited leverage is good for business : Explain why limited leverage is good for business. Show the profitability of the project so that Stephanie can convince her father to purchase the truck by borrowing money.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the equivalent rate with continuous compounding

A bank quotes an interest rate of 14% per annum with quarterly compounding. What is the equivalent rate with (a) continuous compounding and (b) annual compounding?

  Deposit products use different compounding frequencies

Loan/deposit products use different compounding frequencies. For example, mortgage, CDs use monthly compounding. Credit cards use daily compounding, even though customers pay interest on a monthly basis. Bonds use quarterly, semiannual or annual comp..

  Is discount rate uncertainty relatively more problematic

What is the relative importance of cash flow and cost of capital errors for a 10-year project? - Is discount rate uncertainty relatively more problematic for long-term or for short-term projects?

  Purchasing power parity implies that the exchange rate

A steak dinner in the U.S. costs $25, while the exact meal costs 300 pesos across the border in Mexico. Purchasing power parity implies that the Peso/$ exchange rate is: (Please explain the calculation.)

  What is the annual interest amount for the bond

James McCulloch purchased a 20-year U.S. Treasury bond four years ago for $8,500. The bond paid 3.500 percent annual interest. Four years later he sold the bond for $8,580. What is the annual interest amount for the bond? What is the total interest M..

  The required rate of return on the market

The risk-free rate of return is 6%, the required rate of return on the market is 12%, and High-Flyer stock has a beta coefficient of 1.7. If the dividend per share expected during the coming year, D1, is $2.80 and g = 5%, at what price should a share..

  Combined leverage is concerned with the relationship between

Combined leverage is concerned with the relationship between

  The value of the cash coverage ratio

A firm has sales of $4,780, costs of $2,580, interest paid of $173, and depreciation of $481. The tax rate is 34 percent. What is the value of the cash coverage ratio?

  Considering new three-year expansion project

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.4 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be wo..

  Assume that expending effort is cost less to the managers

Assume that expending effort is cost less to the managers and draw the payoff table for this game.

  How much is the monthly payment of her loan

A friend of yours just bought a new sports car. Her $35,000 car loan is financed at an interest rate of 0.75% per month for 48 months. How much is the monthly payment of her loan?

  Bond with five percent annual coupon payments

Consider a 19-year bond with 5 percent annual coupon payments. The market rate (YTM) is 5.3 percent for this bond. The current yield of the bond is _______ percent.

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