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.

compute the financial break-even sales quantity

Answer #1

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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.

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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