Q1) In each of the following cases, determine unknown variable:
| Accounting Break-Even |
Unit Price |
Unit Variable Cost |
Fixed Costs |
Depreciation |
| 127,500 |
$41 |
$30 |
$820,000 |
? |
| 135,000 |
? |
43 |
3,200,000 |
$1,150,000 |
| 5,478 |
98 |
? |
160,000 |
105,000 |
Project has given estimated data: price=$68 per unit; variable costs=$41 per unit: fixed costs=$8,000; required return=15 percent; initial investment=$12,000; life=four years. Ignoring effect of taxes, detemining accounting break-even quantity? Cash break-even quantity? Financial break-even quantity? Determine degree of operating leverage at financial break-even level of output?
Let a project with following data:
accounting break-even quantity=17,000 units;
cash break-even quantity=12,000 units;
life=five years;
fixed costs=$130,000;
variable costs=$23 per unit;
required return=16 percent.
Ignoring effect of taxes, determine financial break-even quanity