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What is the accounting break-even level for the project

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Question - Financial Break-Even Analysis- You are considering investing in a company that cultivates abalone to sell to local restaurants. The discount rate for the company is 15 percent, the initial investment in equipment is $910,000, and the project's economic life is seven years. Assume the equipment is depreciated on a straight-line basis over the project's life and has no salvage value.

Sales Price per abalone. $43

Variable costs per abalone $10.45

Fixed Cost per year $435,000

Depreciation per year $130,000

Tax rate 21%

a. What Is the accounting break-even level for the project?

b. What is the financial break-even level for the project?

Reference no: EM133025129

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