Define each of the costs below as either sunk, opportunity, cash, or book: (a) Amount you could have sold a piece of equipment for last month. (b) Value claimed for tax purposes on a depreciated soda filling machine. (c) Price paid to a consultant for a feasibility study on a prospective project. (d) Monthly utility expense. (e) Salary you could have earned while you were on non-paid leave. (f) Value of floor space in a warehouse facility left empty the past 10 quarters.

A chip manufacturer makes video gaming chip that can be sold for $50. The chip material cost is $15 for each chip. The operations costs of the chip manufacturer (administration etc.) is $100000. The chip manufacturing machinery costs $500000 that is depreciated over 10 years to a salvage value of zero. a) What is the accounting breakeven level of sales in terms of number of chips sold? b) b. What is the NPV breakeven level of sales assuming a tax rate of 35%, 10-year project life and a discount rate of 12%.

You are equipping an office. The total office equipment will have a first cost of2.0Mand a sal-vage value of$200,000. You expect the equipment will last 10 years. Use a spreadsheet to compute the40%bonus depreciation with MACRS depreciation schedule.

Assume that you are thinking about starting your own small business. You have made the following estimates regarding this opportunity: You can rent a location for your business at a cost of $36, 000 per year. The equipment costs incurred to start the business would total $250,000. The equipment would have a 5-year useful life and a salvage value of S 25,000. Your company's estimated sales per year would equal $350,000 and its variable cost of goods sold would be 30% of sales. Other operating costs would include $56, 000 per year in salaries, S4, 000 per year for insurance, $25, 000 per year for utilities, and a 3% sales commission. The payback period for this investment opportunity is closest to:   Multiple Choice 4.08 years, 2.20 years. 3.80 years. 3.08 years.