You are considering investing in a company that cultivates abalone for sale to local restaurants....
60.1K
Verified Solution
Link Copied!
Question
Finance
You are considering investing in a company that cultivates abalone for sale to local restaurants. Use the following information Sales price per abalone $35.60 Variable costs per abalone -$6.70 Fixed costs per year $381,000 Depreciation per year$126,000 Tax rate -35% The discount rate for the company is 15 percent, the initial investment in equipment is $882,000, and the project's economic life is seven years. Assume the equipment is depreciated on a straight-line basis over the project's life a. What is the accounting break-even level for the project? (Do not round intermediate calculations and round your answer to decimal places, e.g., 32.16.) Accounting break-even level b. What is the financial break-even level for the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Financial break-even level units You are considering investing in a company that cultivates abalone for sale to local restaurants. Use the following information Sales price per abalone $35.60 Variable costs per abalone -$6.70 Fixed costs per year $381,000 Depreciation per year$126,000 Tax rate -35% The discount rate for the company is 15 percent, the initial investment in equipment is $882,000, and the project's economic life is seven years. Assume the equipment is depreciated on a straight-line basis over the project's life a. What is the accounting break-even level for the project? (Do not round intermediate calculations and round your answer to decimal places, e.g., 32.16.) Accounting break-even level b. What is the financial break-even level for the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Financial break-even level units
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!