Find the accounting and the cash​ break-even units of production. b. Will the plant make a profit based on its current expected level of​ operations? c.  Will the plant contribute cash flow to the firm at the expected level of​ operations?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter14: Capital Structure Management In Practice
Section14.A: Breakeven Analysis
Problem 8P
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 10)
​(Break-even analysis)  The Marvel Mfg. Company is considering whether or not to construct a new robotic production facility. The cost of this new facility is
​$612,000
and it is expected to have a​ six-year life with annual depreciation expense of
​$102,000
and no salvage value. Annual sales from the new facility are expected to be
2,010
units with a price of
​$1,060
per unit. Variable production costs are
​$630
per​ unit, and fixed cash expenses are
$76,000
per year.
 
a. Find the accounting and the cash​ break-even units of production.
b. Will the plant make a profit based on its current expected level of​ operations?
c.  Will the plant contribute cash flow to the firm at the expected level of​ operations?
 
 
 

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Part 1
a.  The accounting​ break-even units of production is______units. 
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