Solution-What is the npv break-even level of diamonds sold

What is the npv break-even level of diamonds sold per year

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Reference no: EM132520956

Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $160. The materials cost for a standard diamond is $60. The fixed costs incurred each year for factory upkeep and administrative expenses are $218,000. The machinery costs $2.1 million and is depreciated straight-line over 10 years to a salvage value of zero.

Question a. What is the accounting break-even level of sales in terms of number of diamonds sold? (Do not round intermediate calculations.)

Question b. What is the NPV break-even level of diamonds sold per year assuming a tax rate of 21%, a 10-year project life, and a discount rate of 12%? (Do not round intermediate calculations. Round your answer to the nearest whole number.)

Reference no: EM132520956

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What is the npv break-even level of diamonds sold per year

Reference no: EM132520956

Reference no: EM132520956

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