Modern artifacts can produce keepsakes

Assignment Help Finance Basics

Reference no: EM13878764

Modern Artifacts can produce keepsakes that will be sold for $50 each. Nondepreciation fixed costs are $2,900 per year, and variable costs are $30 per unit. The initial investment of $3,000 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 14%.

A. What is the accounting break-even level of sales if the firm pays no taxes? (Round your answer to the nearest whole number)

B. What is the NPV break-even level of sales if the firm pays no taxes? (Round your answer to the nearest whole number)

C. What is the accounting break-even level of sales if the firm's tax rate is 40%? (Round your answer to the nearest whole number)

D. What is the NPV break-even level of sales if the firm's tax rate is 40%? (Round your answer to the nearest whole number)

Reference no: EM13878764

Questions Cloud

How does the presence of cost of financial distress : How does the presence of cost of financial distress combined with the tax deductibility of interest (and the resulting interest tax savings) affect a firm's weighted average cost of capital as the firm increases its use of debt financing from no debt..

Organizations non operating and operating activities : If an organization's non operating and operating activities are profitable in a given year, which of the following statements is most correct?

Prepare flexible budgets for the final quarter at production : Prepare flexible budgets for the final quarter at production (and sales) levels of 18,000 and 24,000 units. Forecast the profit at these sales levels.

About the invest in stock : You want to invest in a stock that pays $5 annually dividend for the next four years, you will sell the stock for $20. If you want to earn 12% on this investment, what is the price for this stock today?

Modern artifacts can produce keepsakes : Modern Artifacts can produce keepsakes that will be sold for $50 each. Nondepreciation fixed costs are $2,900 per year, and variable costs are $30 per unit. The initial investment of $3,000 will be depreciated straight-line over its useful life of ..

About short-term debt : Which of the following statements about short-term debt is(are) most correct?

The sole owner of duarte spring company : 1. You're the sole owner of Duarte Spring Company; you paid $200K for the business when you acquired the firm five years ago. Duarte is a manufacturer of high-end springs used by major aerospace and aircraft manufacturing companies. Six months ago, y..

Describe a job or careers in marketing that interest you : Describe a job or careers in marketing that interest you. (Market Research). Describe two jobs in your field that interest you. Describe how in that role you may also act as a part-time marketer. (Research Analyst, Statistician)

How much should an investor pay for each bond : A corporation has promised to pay $1,000 20 years from today for each bond sold now. No interest will be paid on the bonds during the 20 years, and the bonds are discounted at an interest rate of 7%, compounded semiannually. Approximately how much sh..

User Account

All Pages