Question
In: Finance
You are considering investing in a company that cultivates abalone for sale to local restaurants. Use...
|
You are considering investing in a company that cultivates abalone for sale to local restaurants. Use the following information: |
| Sales price per abalone | = | $35.20 |
| Variable costs per abalone | = | $6.30 |
| Fixed costs per year | = | $377,000 |
| Depreciation per year | = | $122,000 |
| Tax rate | = | 34% |
|
The discount rate for the company is 13 percent, the initial investment in equipment is $732,000, and the project’s economic life is six years. Assume the equipment is depreciated on a straight-line basis over the project’s life. |
| a. |
What is the accounting break-even level for the project? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
| Accounting break-even level | units |
| b. |
What is the financial break-even level for the project? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
| Financial break-even level |
units |
Solutions
jeff jeffy answered 2 years agoRelated Solutions
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Variable costs per abalone
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Fixed costs per year
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Depreciation per year
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Tax rate
=
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Tax rate
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You are considering investing in a company that cultivates abalone for sale to local restaurants. Use...
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information: Sales price per abalone = $44.10 Variable costs per
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depreciated on a straight-line basis over...
You are considering investing in a company that cultivates abalone for sale to local restaurants. Use...
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=
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Variable costs per abalone
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