Modern Artifacts can produce keepsakes that will be sold for $70 each. Non-depreciated fixed costs are $1,050 per year and variable costs are $58 per unit. a. If the project requires an initial investment of $2,940 and is expected to last for 8 years and the firm pays no taxes, what are the accounting and NPV break-even levels of sales? The initial investment will be depreciated straight-line over 8 years to a final value of zero, and the discount rate is 9%. (Round your answers to the nearest whole dollar.) Accounting break-even sales level NPV break-even sales level $ b. How do your answers change if the firm's tax rate is 40%? (Round your answers to the nearest whole dollar.) Accounting break-even sales level NPV break-even sales level

Modern Artifacts can produce keepsakes that will be sold for $70 each. Non-depreciated fixed costs are $1,050 per year and variable costs are $58 per unit. a. If the project requires an initial investment of $2,940 and is expected to last for 8 years and the firm pays no taxes, what are the accounting and NPV break-even levels of sales? The initial investment will be depreciated straight-line over 8 years to a final value of zero, and the discount rate is 9%. (Round your answers to the nearest whole dollar.) Accounting break-even sales level NPV break-even sales level $ b. How do your answers change if the firm's tax rate is 40%? (Round your answers to the nearest whole dollar.) Accounting break-even sales level NPV break-even sales level

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 2P

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