What are the quantities of unit sales at the accounting

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Reference no: EM133338954

Question: All-equity (i.e., Unlevered) firm XYZ is now considering an investment with an initial investment of $750,000 and a lifespan of 5 years. The expected sales (by this investment) are 500 units per year with $2,500 of unit price. Variable cost per unit is expected to be $1,500, and fixed cost would be $200,000 per year. Depreciation of this investment is based on the straight-line method and has no salvage value at the end of project life. The required rate of return is 8%. In this problem, just ignore taxes

1. What are the quantities of unit sales (=Q) at the accounting break-even point?

2. What are the quantities of unit sales (=Q) at the cash break-even point?

3. What are the quantities of unit sales (=Q) at the financial break-even point?

Reference no: EM133338954

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