Modern Artifacts can produce keepsakes that will be sold for $80 each. Nondepreciation fixed costs are $1,700 per year, and variable costs are $60 per unit. The initial investment of $2,000 will be...


Modern Artifacts can produce keepsakes that will be sold for $80 each. Nondepreciation fixed costs are $1,700 per year, and variable costs are $60 per unit. The initial investment of $2,000 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 12%.




(For all the requirements, do not round intermediate calculations. Round your answer to the nearest whole number.)




a.What is the accounting break-even level of sales if the firm pays no taxes?



b.What is the NPV break-even level of sales if the firm pays no taxes?



c.What is the accounting break-even level of sales if the firm’s tax rate is 35%?



d.What is the NPV break-even level of sales if the firm’s tax rate is 35%?



Jun 04, 2022
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