An engineer of a manufacturing company has determined the costs of producing a new product to be as follows: Equipment cost: $300,000/year Variable cost per unit of production: $15.00 Overhead cost: $50,000/year The company is planning to run this project for 5 years and estimated that the product can be sold for a unit price of $40. How many units must be produced and sold each year to break even? [Hints: no interest is given, so no consideration of time value of money. Use the knowledge you learnt in chapter 2]

Modern Artifacts can produce keepsakes that will be sold for $100 each. Nondepreciation fixed costs are $1,300 per year, and variable costs are $70 per unit. The initial investment of $4,000 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?

Consider a project to supply Detroit with 25,000 tons of machine screws annually for automobile production. You will need an initial $5,400,000 investment in threading equipment to get the project started; the project will last for 6 years. The accounting department estimates that annual fixed costs will be $1,300,000 and that variable costs should be $245 per ton; accounting will depreciate the initial fixed asset investment straight-line to zero over the 6-year project life. It also estimates a salvage value of $675,000 after dismantling costs. The marketing department estimates that the automakers will let the contract at a selling price of $356 per ton. The engineering department estimates you will need an initial net working capital investment of $520,000. You require a return of 9 percent and face a tax rate of 21 percent on this project. Calculate the accounting, cash, and financial break-even quantities. (Do not round intermediate calculations and round your answers to the…

You are evaluating a project for The Farstroke golf club, guaranteed to correct that nasty slice. You estimate the sales price of The Farstroke to be $490 per unit and sales volume to be 1,200 units in year 1; 1,125 units in year 2; and 1,000 units in year 3. The project has a 3-year life. Variable costs amount to $270 per unit and fixed costs are $100,000 per year. The project requires an initial investment of $138,000 in assets, which can be depreciated using bonus depreciation. The actual market value of these assets at the end of year 3 is expected to be $26,000. NWC requirements at the beginning of each year will be approximately 30 percent of the projected sales during the coming year. The tax rate is 21 percent and the required return on the project is 11 percent. What is the operating cash flow for the project in year 2? Note: Enter your answer as a whole number. Operating cash flow