Consider a project with the following data: accounting break-even quantity = 29,000 units; cash break-even quantity = 15,950 units; life = 10 years; fixed costs = $203,000; variable costs = $24 per unit; required return = 14 percent; depreciation = straight line. Ignoring the effect of taxes, what is the financial break-even quantity?
A)38,723 units
B)39,201 units
C)39,458 units
D)39,624 units
E)40,969 units

Question

Quizplus · Accepted Answer

15,950 = $203,000/(P - $24); P = $36.72727329,000 = ($203,000 + D)/($36.727273 - $24); D = $166,090.90Initial investment = 10 F1F1F1S1F1F1F10 $166,090.90 = $1,660,909 Q_F = ($203,000 + $318,418.75)/($36.727273 - $24) = 40,969 units

Consider a Project with the Following Data: Accounting Break-Even Quantity