A project has the following estimated data: Price = $70 per unit; variable costs = $45 per unit; fixed costs = $19,500; required return = 12 percent; initial investment = $24,000; life = six years. a. Ignoring the effect of taxes, what is the accounting break-even quantity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the cash break-even quantity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the financial break-even quantity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What is the degree of operating leverage at the financial break-even level of output? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) a. Accounting break-even quantity b. Cash break-even quantity c. Financial break-even quantity d. DOL A B X✓ fx Input area: с Price per unit Variable cost per unit Fixed costs Required return Initial investment Life Output area: D E F G 555 53 $ 22 31,460 12% 46,200 4 Accounting break-even Cash break-even 1,387.42 1,014.84 OCF $ 15,210.63 Financial break-even 1,505.50 DOL 3.068

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Question

plese answer correctly by giving me the right answer

 make sure there is no error; use the excel picture example to break down each answer for (a,b,c,d)

 

A project has the following estimated data: Price = $70 per unit; variable costs = $45 per
unit; fixed costs = $19,500; required return = 12 percent; initial investment = $24,000; life
= six years.
a. Ignoring the effect of taxes, what is the accounting break-even quantity? (Do not
round intermediate calculations and round your answer to 2 decimal places, e.g.,
32.16.)
b. What is the cash break-even quantity? (Do not round intermediate calculations and
round your answer to 2 decimal places, e.g., 32.16.)
c. What is the financial break-even quantity? (Do not round intermediate calculations
and round your answer to 2 decimal places, e.g., 32.16.)
d. What is the degree of operating leverage at the financial break-even level of output?
(Do not round intermediate calculations and round your answer to 3 decimal
places, e.g., 32.161.)
a. Accounting break-even quantity
b. Cash break-even quantity
c. Financial break-even quantity
d. DOL
Transcribed Image Text:A project has the following estimated data: Price = $70 per unit; variable costs = $45 per unit; fixed costs = $19,500; required return = 12 percent; initial investment = $24,000; life = six years. a. Ignoring the effect of taxes, what is the accounting break-even quantity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the cash break-even quantity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the financial break-even quantity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What is the degree of operating leverage at the financial break-even level of output? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) a. Accounting break-even quantity b. Cash break-even quantity c. Financial break-even quantity d. DOL
A
B
X✓ fx
Input area:
с
Price per unit
Variable cost per unit
Fixed costs
Required return
Initial investment
Life
Output area:
D
E
F
G
555
53
$
22
31,460
12%
46,200
4
Accounting break-even
Cash break-even
1,387.42
1,014.84
OCF
$
15,210.63
Financial break-even
1,505.50
DOL
3.068
Transcribed Image Text:A B X✓ fx Input area: с Price per unit Variable cost per unit Fixed costs Required return Initial investment Life Output area: D E F G 555 53 $ 22 31,460 12% 46,200 4 Accounting break-even Cash break-even 1,387.42 1,014.84 OCF $ 15,210.63 Financial break-even 1,505.50 DOL 3.068
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