Question

the quorum company has a prospective 6 year project that requires initial fixed assets costing $963,000, annual fixed costs of $403,400, variable costs per unit of $123.60, a sales price per unit of $249, a discount rate of 14 percent, and a tax rate of 21 percent. the asset will be depreciated straight-line to zero over the life of the project.

explain why as a manager calculating accounting break-even sales quantity and financial break-even sales quantity are important.

Answer #1

the quorum company has a prospective 6 year project that
requires initial fixed assets costing $963,000, annual fixed costs
of $403,400, variable costs per unit of $123.60, a sales price per
unit of $249, a discount rate of 14 percent, and a tax rate of 21
percent. the asset will be depreciated straight-line to zero over
the life of the project.
compute the financial break-even sales quantity

the quorum company has a prospective 6 year project
that requires initial fixed assets of $963,000, annual fixed
$403,400, variable costs $123.60 per unit, sales price of $249,
discount rate 14%, tax rate 21%. asset straight line depreciated to
zero over life of project.
compute accounting break even sales
compute financial break even quantity

The Quorum Company has a prospective 6-year project that
requires initial fixed assets costing $962,000, annual fixed costs
of $403,400, variable costs per unit of $123.60, a sales price per
unit of $249, a discount rate of 14 percent, and a tax rate of 21
percent. What is the present value break-even point in units per
year?
A. 4,995
B. 5,852
C. 6,144
D. 5,375
E. 6,081

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project that requires an initial fixed asset investment of $2.32
million. The fixed asset will be depreciated straight-line to zero
over its three-year tax life, after which time it will be
worthless. The project is estimated to generate $1.735 million in
annual sales, with costs of $650,000. If the tax rate is 21
percent, what is the OCF for this project?

Quad Enterprises is considering a new three year expansion
project that requires an initial fixed asset investment of $2.29
million. The fixed asset will be depreciated straight-line to zero
over its three year tax life. The project is estimated to generate
$1,790,000 in annual sales, with the costs of $700,000. The project
requires an initial investment in net working capital of $410,000,
and the fixed asset will have a market value of $420,000 at the end
of the project. A.)...

Quad Enterprises is considering a new three-year expansion
project that requires an initial fixed asset investment of $2.32
million. The fixed asset will be depreciated straight-line to zero
over its three-year tax life, after which time it will be
worthless. The project is estimated to generate $1,660,000 in
annual sales, with costs of $635,000. If the tax rate is 21
percent, what is the OCF for this project? (Do not round
intermediate calculations and enter your answer in dollars, not...

Bobcat Enterprises is considering a new three-year expansion
project that requires an initial fixed asset investment of $2.10
million. The fixed asset will be depreciated straight-line to zero
over its three-year tax life, after which time it will be
worthless. The project is estimated to generate $1.45 million in
annual sales, with costs of $495,000. If the tax rate is 21
percent, what is the OCF for this project? (Do not round
intermediate calculations.) Multiple Choice $788,465.45 $842,922.10
$901,450.00 $767,150...

Quad Enterprises is considering a new three-year expansion
project that requires an initial fixed asset investment of $1.96
million. The fixed asset will be depreciated straight-line to zero
over its three-year tax life, after which time it will be
worthless. The project is estimated to generate $1.905 million in
annual sales, with costs of $485,000. The tax rate is 21 percent.
Suppose the required return on the project is 7 percent. What is
the project’s NPV?
Select one:
A. $1,256,087.76...

Down Under Boomerang, Inc., is considering a new three-year
expansion project that requires an initial fixed asset investment
of $2.73 million. The fixed asset will be depreciated straight-line
to zero over its three-year tax life, after which time it will be
worthless. The project is estimated to generate $2,090,000 in
annual sales, with costs of $785,000. The tax rate is 21 percent
and the required return is 13 percent. What is the project’s NPV?
(Do not round intermediate calculations and...

Quad Enterprises is considering a new three-year expansion
project that requires an initial fixed asset investment of $2.29
million. The fixed asset will be depreciated straight-line to zero
over its three-year tax life, after which time it will be
worthless. The project is estimated to generate $1,715,000 in
annual sales, with costs of $625,000. The tax rate is 21 percent
and the required return on the project is 10 percent. What is the
project’s NPV? (Do not round intermediate
calculations....

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