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Oduvanchick [21]
3 years ago
5

Mosler Company has compiled this information for a new project:Initial investment: $229,700Fixed costs: $66,800Variable costs: $

5.07 per unitSelling price: $12.99 per unitDiscount rate: 14 percentProject life: 4 yearsTax rate: 34 percentDepreciation is straight-line to zero over the project's life. What is the accounting break-even point?A. 11,301.82 unitsB. 13,200.00 unitsC. 15,684.97 unitsD. 10,352.08 unitsE. 12,388.60 units
Business
1 answer:
xxMikexx [17]3 years ago
8 0

Answer:

15,684.97 units

Explanation:

Given that

Initial investment = $229,700

Project life = 4 year

Fixed cost = $66,800

Price variable cost = $5.07

Selling price = $12.99

Variable costs = $5.07

The computation of break-even point is shown below:-

Depreciation = Initial investment ÷ Project life

= $229,700 ÷ 4

= $57,425

Break even point = (Fixed cost + Depreciation) ÷ (Price variable cost)

= ($66,800 + $57,425) ÷ ($12.99 - $5.07)

= 15,684.97 units

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Answer:

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The formula for required rate of return under CAPM is,

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We will first calculate the market risk premium using the required rate of return for stock, beta and risk free rate and plugging these values in the formula above.

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3 years ago
When diversified firms use the revenues from profitable businesses to subsidize the operations of another business and then set
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