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A project has the following estimated data: Price=$50 per unit Variable Cost=$30 per...

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Finance

A project has the following estimated data:

Price=$50 per unit

Variable Cost=$30 per unit

Fixed Cost =$22,000

Required return=10%

Initial Investment=$32,000

Life of the project=4 years

Salvage value=0

a) Ignoring the effect of the taxes, what is the financial break-even quantity?

b) What is the degree of operating leverage at the financial break-even quantity?

c) If sales increase by 5%, how much will the operating cash flow be?

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