Block, S., Hirt, G., & Danielsen, B. (2017). Foundations of Financial Management. New York, NY: McGraw-Hill Education. 16th edition. Question #8:  Air Purifier Inc. computes its break-even point strictly on the basis of cash expenditures related to fixed costs.  Its total fixed costs are $2,450,000, but 15% of this value is represented by depreciation.  Its contribution margin (price minus variable costs) for each unit is $40.  How many units does the firm need to sell to reach the cash break-even point?

Question

Block, S., Hirt, G., & Danielsen, B. (2017). Foundations of Financial Management. New York, NY: McGraw-Hill Education. 16th edition.

Question #8:  Air Purifier Inc. computes its break-even point strictly on the basis of cash expenditures related to fixed costs.  Its total fixed costs are $2,450,000, but 15% of this value is represented by depreciation.  Its contribution margin (price minus variable costs) for each unit is $40.  How many units does the firm need to sell to reach the cash break-even point?

Expert Answer

1 Rating

Want to see the step-by-step answer?

See Answer

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

See Answer
*Response times vary by subject and question complexity. Median response time is 34 minutes and may be longer for new subjects.
Tagged in

Related Finance Q&A

Find answers to questions asked by student like you

Q: Suppose 1-year Treasury bonds yield 3.10% while 2-year T-bonds yield 4.80%.  Assuming the pure expec...

A: 1-year Treasury bonds yield, S01 =  3.10%2-year T-bonds yield, S02 =  4.80%. The yield on a 1-year T...

Q: Why should a real estate listing contract be in writing and what are the essential elements of a lis...

A: Real estate contracts refer to legal aggreement between different parties. It is enforceable by law ...

Q: Consider a project to produce solar water heaters. It requires a $10 million investment and offers a...

A: a.Calculation of Present Value of Interest Tax Shield:Excel Spreadsheet:

Q: Belotti Company just paid a dividend of $1.67 per share to its stockholders. Market analysts believe...

A: Calculation of Required Return:

Q: Could you show me to solve this problem step by step. Please

A: The equation we have to solve is as shown on the white board. We will take the following approach.As...

Q: Walter is investing $5,000in an account paying 6.75 percent annually for three years. What is the in...

A: Principal invested, P = $ 5,000Interest rate, R = 6.75%Time, T = 3 yearsAs a first step, we will fin...

Q: What are investment assets ?

A: Investment Assets: Investment assets are termed as tangible or intangible things that are acquired f...

Q: 3. Finding the interest rate and the number of years Aa Aa E The future value and present value equa...

A: Calculating the implied interest rate the investor will earn on the security by using the formula of...

Q: Tommy’s Automotive Group currently has 6,400,000 shares of stock outstanding and will report earning...

A: Calculate the value of immediate dilution potential for this new stock issue. We have,Earnings per s...