4. The Arab Dream Company is considering a project that costs $500,000, has a lifespan...
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4. The Arab Dream Company is considering a project that costs $500,000, has a lifespan of 5 years, has no liquidation value and will result in a decrease in net working capital of 100,000 Depreciation is calculated on a straight line to zero over the life of the project and sales are expected at 60,000 units per year. The unit price is $30, the variable cost per unit is $15, and the fixed costs are $660,000 per year. The tax rate is 30 percent, and it requires a 10 percent retum on this project. Calculate the financial break-even point2 (3 marks) 5. Based on the data of the fourth question and your solution, what is the degree of operating leverage at a point Financial break-even (degree)
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