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Consider the following project: A new product requires an initial investment of $3,000,000 and will be depreciated to an expected salvage of zero over 3 years. The price of the new product is expected to be $37,500, and the variable cost per unit is $27,500. The fixed cost (FC) is $1,000,000

a) What is the accounting break-even point each year?

b) What is the operating cash flow at the accounting break-even point (ignoring taxes)?

c) What is the cash break-even quantity (ignoring taxes)?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92079482

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