What is the accounting break-even point

Assignment Help Financial Management

Reference no: EM132017307

A company is considering a 5-year project that opens a new product line and requires an initial outlay of $80,000. The assumed selling price is $93 per unit, and the variable cost is $66 per unit. Fixed costs not including depreciation are $20,000 per year. Assume depreciation is calculated using stright-line down to zero salvage value. If the required rate of return is 10% per year, what is the accounting break-even point? (Answer to the nearest whole unit.)

Reference no: EM132017307

Questions Cloud

The sales tax treatment of internet : The sales tax treatment of internet or mail-order purchases is quite controversial, as discussed in the section.

What is the current value of preferred stock : X-Tech Company issued preferred stock many years ago. What is the current value of this preferred stock? What was the original issue price?

Opens new product line and requires initial outlay : A company is considering a 5-year project that opens a new product line and requires an initial outlay of $77,000.

What is after tax salvage cash flow for new machine : what is the after tax salvage cash flow for this new machine at the end of the project?

What is the accounting break-even point : If the required rate of return is 10% per year, what is the accounting break-even point?

What is good estimate for the cost of equity capital : Using the capital asset pricing model, and the information provided below, what is a good estimate for the cost of equity capital?

What is good estimate for your company stock beta : what is a good estimate for your company's stock beta if your capital structure is 60.0% debt and 40.0% equity?

Estimated annual operating cash flow : If straight-line depreciation is used to calculate annual depreciation, what is the estimated annual operating cash flow from this project each year?

Considering six-year project that requires an initial outlay : A company is considering a 6-year project that requires an initial outlay of $23,000.

User Account

All Pages