User Account

All Pages

Calculate the accounting break-even point

Assignment Help Financial Accounting
Reference no: EM133093061

Question - We are evaluating a project that costs $832,000, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 40,000 units per year. Price per unit is $40, variable cost per unit is $15, and fixed costs are $700,000 per year. The tax rate is 35 percent, and we require a return of 18 percent on this project.

Required -

a. Calculate the accounting break-even point.

b-1. Calculate the base-case cash flow and NPV.

b-2. What is the sensitivity of NPV to changes in the sales figure?

c. What is the sensitivity of OCF to changes in the variable cost figure?

Reference no: EM133093061

Questions Cloud

Which variable is a dependent variable in the data : Which variable is a dependent variable in the data set provided? What is value of mean and how it is calculated?
Crtc application filed by canadian : What was the nature of the CRTC application filed by Canadian graduate student Ben Klass as detailed in May's documentary Dude, Where's My TV?
What amount should red report as cost of goods sold : The balance in the LIFO Reserve account at the end of 2017 was $90,000. What amount should Red report as Cost of Goods Sold
Industry analysis : What industry sectors tend to be better performers? Why? How may Covid-19 lead to growth in certain sectors and decline of other sectors
Calculate the accounting break-even point : Assume that depreciation is straight-line to zero over life of project. Sales are projected at 40,000 units per year. Calculate accounting break-eveb point
Organizational strategy and risk management : Explain how project and portfolio management relate to organizational strategy and risk management.
Level of the corporate hierarchy : This question is a Management Information Systems related question. For a fast-food chain, name and describe the basic functions of two specific systems you wou
Explain the customer data and behaviours : An effective customer loyalty program combines customer data and behaviours so that the company can offer
What amount should the farm report in its statement : What amount should the Farm report in its 2020 statement of financial position as inventory related to the above biological assets

Reviews

Write a Review

Financial Accounting Questions & Answers

  Create a general journal

Mei Bong Company started its business in financial consulting services. March 28, Paid employee salaries of Rp. 2 million. Create a general journal

  Cost of goods sold in perpetual inventory system

Calculation of Cost of Goods sold in Perpetual Inventory System - What is the cost of finished goods manufactured in August and What is the cost of goods sold manufactured in August?

  Find out the monthly break-even in unit sales

Akerley, Inc., produces and sells a single product. The product sells for $140.00 per unit and its variable expense is $42.00 per unit. The company's monthly fixed expense is $393,960. Find out the monthly break-even in unit sales.

  Calculate the effective ceiling purchase price in uk pound

If in November the spot rate is $1.30/£, would you exercise the options? What will be the dollar cost for the £500,000 payment?

  What amount should be reported as the capital balance

In relation to the 3rd question, what amount should be reported as the capital balance of partner E after the retirement of partner F

  Compute what will be resulting percentage change in earnings

Compute what will be resulting percentage change in earnings per share of Rat Race Home Security, Inc. if they expect operating profit to change 0.3 percent?

  Best capital budgeting method for ranking investment project

The best capital budgeting method for ranking investment projects of different dollar amounts is the:

  What price would estimate for xyz stock now

If you are a shareholder of XYZ Corporation, would you ask the Board to pay out all earnings as dividend to shareholders? Why or why not?

  Illustrate what are the consequences of not telling

Illustrate what are the consequences of not telling the president of our gross miscalculations, both ethical and non-ethical? Are there other ethical implications or issues that you and the president need to consider in this situation?

  What is the amount of dominic taxable? income

During 2020?, Dominic incurs the following deductible? expenses: $1,100 in state income? taxes. What is the amount of Dominic's taxable? income?

  Approach now used for changes in depreciation methods

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. Problem 1 Prospective approach The approach now used for changes in depreciation methods.

  Prepare journal entries recorded by post delivery service

Prepare all journal entries recorded by Post Delivery Service related to its investment in Script Real Estate assuming Post uses the fully adjusted equity

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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