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A project has the following estimated data: price = $75 per unit; variable costs = $29.25...

A project has the following estimated data: price = $75 per unit; variable costs = $29.25 per unit; fixed costs = $5,200; required return = 9 percent; initial investment = $9,000; life = seven years. Ignore the effect of taxes.

a. What is the accounting break-even quantity?

  • 142
  • 114
  • 170
  • 156
  • 135

b. What is the cash break-even quantity?

  • 114
  • 142
  • 108
  • 91
  • 103

c. What is the financial break-even quantity?

  • 153
  • 184
  • 168
  • 138
  • 122

d. What is the degree of operating leverage at the financial break-even level of output?

  • 3.9079
  • 1.7471
  • 1.5455
  • 1.1423
  • 0.9407

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Expert Solution

jeff jeffy answered 2 years ago
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