What is the NPV break-even level of sales

Assignment Help Managerial Accounting
Reference no: EM133059929

Question - Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $160. The materials cost for a synthetic diamond is $100. The fixed costs incurred each year for factory upkeep and administrative expenses are $1,100,000. The machinery costs $1.18 million and is depreciated straight-line over 10 years to a salvage value of zero.

a. What is the accounting break-even level of sales in terms of number of diamonds sold?

b. What is the NPV break-even level of sales assuming a tax rate of 35%, a 10-year project life, and a discount rate of 12%?

Reference no: EM133059929

Questions Cloud

Prepare LBJs journal entries on January : Prepare LBJ's journal entries on January 1, 2020 (commencement of the operating lease), and on December 31, 2020. Assume the implicit rate used by the lessor
What is the value of the option to sell the solar power : Pinder Ltd is considering building a solar power plant. The solar power plant will cost $9.8 million immediately, and will take 1 year to build.
Review theories of cross-cultural management : Critically review the emergence of the international human resources function in tourism and hospitality organisations - review theories of cross-cultural
Wealth of pinder ltd shareholders : Pinder Ltd is considering investing $500,000 in a factory that will produce electric bicycles. Pinder Ltd has secured a contract with a major retailer who has g
What is the NPV break-even level of sales : What is the NPV break-even level of sales assuming a tax rate of 35%, a 10-year project life, and a discount rate of 12%
What are the annual projected free cash flows : 1. What are the annual projected free cash flows? 2. What is the value of the project assuming the firm was entirely equity financed?
Describe two of the possible three standby letters : ACME Inc. a Canadian exporter of different car parts has negotiated a deal with Sapporo Motor Performance an American retailer of high-performance car accessori
What is the after tax cost of debt : Corporation has semiannual bonds outstanding with 14 years to maturity and the bonds are currently priced at $850. If the bonds have a coupon rate of 6 percent,
Standard deviation of the call option return : Suppose that in a one-period binomial model there is a European style call option that pays $15 in the up scenario and $0 in the down scenario.

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd