Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. consider a project to supply detroit with 26,000 t

Consider a project to supply Detroit with 26,000 tons of machine screws annually for automobile...

70.2K

Verified Solution

Question

Accounting

Consider a project to supply Detroit with 26,000 tons of machine screws annually for automobile production. You will need an initial $5,500,000 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 $1,325,000 and that variable costs should be $250 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 $700,000 after dismantling costs. The marketing department estimates that the automakers will let the contract at a selling price of $362 per ton. The engineering department estimates you will need an initial net working capital investment of $530,000. You require a return of 11 percent and face a tax rate of 22 percent on this project.

Calculate cash break-even quantity

Calculate accounting break-even quantity

Calculate financial break-even quantity

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students