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Given the following information: Price/Unit 225 VC/Unit 75 FC 500,000 Tax Rate 21% Rate 10% Machine Cost 3,000,000 Life 4 Depreciation Straight Line   1. Calculate the equivalent annual cost of the machine. (Round to 2 decimals) 2. Calculate the financial break-even number of units for the project. (Round to 2 decimals) 3. Using the FBE units, calculate the annual operating cash flows for the project. (Round to 2 decimals)

Given the following information: Price/Unit 225 VC/Unit 75 FC 500,000 Tax Rate 21% Rate 10% Machine Cost 3,000,000 Life 4 Depreciation Straight Line   1. Calculate the equivalent annual cost of the machine. (Round to 2 decimals) 2. Calculate the financial break-even number of units for the project. (Round to 2 decimals) 3. Using the FBE units, calculate the annual operating cash flows for the project. (Round to 2 decimals)

Essentials Of Investments
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
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Given the following information:

Price/Unit 225
VC/Unit 75
FC 500,000
Tax Rate 21%
Rate 10%
Machine Cost 3,000,000
Life 4
Depreciation Straight Line

 

1. Calculate the equivalent annual cost of the machine. (Round to 2 decimals)

2. Calculate the financial break-even number of units for the project. (Round to 2 decimals)

3. Using the FBE units, calculate the annual operating cash flows for the project. (Round to 2 decimals)
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