A project has the following estimated data: price = $74 per unit; variable costs = $39.22 per unit; fixed costs = $6,500;

A project has a unit price of $5,000, a variable cost per unit of $3,750, fixed costs of $17,000,000, and depreciation expense of $6,970,000. What is the accounting break-even quantity?    A.  6,970 units B.  10,030 units C.  17,000 units D.  18,470 units E.  19,176 units QAccounting break-even = ($17,000,000 + $6,970,000)/($5,000 - $3,750) = 19,176 units

93.

A project has the following estimated data: price = $74 per unit; variable costs = $39.22 per unit; fixed costs = $6,500; required return = 8 percent; initial investment = $8,000; life = 4 years. Ignore the effect of taxes. What is the degree of operating leverage at the financial break-even level of output?    A.  2.716 B.  3.691 C.  4.528 D.  6.003 E.  7.337   DOL = 1 + (6,500/$2,415.37) = 3.691

94.

Consider a project with the following data: accounting break-even quantity = 29,000 units; cash break-even quantity = 16,250 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.  40,693 units 16,250 = $203,000/(P - $24); P = $36.4923077 29,000 = ($203,000 + D)/($36.4923077 - $24); D = $159,276.923 Initial investment = 10 × $159,276.923 = $1,592,769.23   QF = ($203,000 + $305,355.43)/($36.4923077 - $24) = 40,693.47 units