Cool Shades, Inc. (CSI) manufactures biotech sunglasses. The variable materials cost is $1.69 per unit

Cool Shades, Inc. (CSI) manufactures biotech sunglasses. The variable materials cost is $1.69 per unit, and the variable labor cost is $3.04 per unit. Suppose the firm incurs fixed costs of $750,000 during a year in which total production is 450,000 units and the selling price is $11.50 per unit. What is the cash break-even point?    A.  76,453 units B.  88,652 units C.  110,783 units D.  128,907 units E.  140,768 units QCash Break-even = $750,000/($11.50 - $1.69 - $3.04) = 110,783 units

90.

Mountain Gear can manufacture mountain climbing shoes for $15.25 per pair in variable raw material costs and $18.46 per paid in variable labor costs. The shoes sell for $135 per pair. Last year, production was 170,000 pairs and fixed costs were $830,000. What is the minimum acceptable total revenue the company should accept for a one-time order for an extra 10,000 pairs?    A.  $149,500 B.  $287,600 C.  $337,100 D.  $380,211 E.  $1,164,100 Marginal total revenue = 10,000 × ($15.25 + $18.46) = $337,100

91.

We are evaluating a project that costs $854,000, has a 15-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 154,000 units per year. Price per unit is $41, variable cost per unit is $20, and fixed costs are $865,102 per year. The tax rate is 33 percent, and we require a 14 percent return on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within ±14 percent. What is the worst-case NPV?    A.  $984,613 B.  $1,267,008 C.  $1,489,511 D.  $1,782,409 E.  $1,993,870 OCFWorst = {[($41 × 0.86) - ($20 × 1.14)][154,000 × 0.86] - ($865,102 × 1.14)}{1 - 0.33) + ($854,000/15)(0.33) = $463,658.70