Accounting break-even level of sales

Reference no: EM13822079

Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $140.00; the materials cost for a standard diamond is $40.00; the fixed costs incurred each year for factory upkeep and administrative expenses are $216,000; the machinery costs $2.5 million and is depreciated straight-line over 10 years to a salvage value of zero.

A) What is the accounting break-even level of sales in terms of number of diamonds sold?

B) what is the NPV break-even level of sales assuming a tax rate of 35%, a 10-year project life, and a discount rate of 12%?

Reference no: EM13822079

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