What is the accounting break-even level of sales

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Problem: Modern Artifacts can produce keepsakes that will be sold for $110 each. Nondepreciation fixed costs are $1,600 per year, and variable costs are $90 per unit. The initial investment of $4,500 will be depreciated straight-line over its useful life of five years to a final value of zero, and the discount rate is 10%.

  1. What is the accounting break-even level of sales if the firm pays no taxes?
  2. What is the NPV break-even level of sales if the firm pays no taxes? (Do not round intermediate calculations. Round your final answer to the nearest whole number.)
  3. What is the accounting break-even level of sales if the firm's tax rate is 20%?
  4. What is the NPV break-even level of sales if the firm's tax rate is 20%? (Do not round intermediate calculations. Round your final answer to the nearest whole number.)

Reference no: EM132459366

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