1) Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $100. The materials cost for a standard diamond is $40. The fixed costs incurred each year for the factory upkeep and administrative expenses are $200,000. The machine costs $1 million and is depreciated straight-line over 10 years to a salvage value of zero. a.What is the accounting break-even level of sales in terms of the number of diamonds sold? b.What is the economic break-even level of sales assuming a tax rate of 21 percent, a 10 year project life, and a discount of 12 percent?
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1) Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold...
Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $120. The materials cost for a standard diamond is $70. The fixed costs incurred each year for factory upkeep and administrative expenses are $215,000. The machinery costs $2.3 million and is depreciated straight-line over 10 years to a salvage value of zero. a. What is the accounting break-even level of sales in terms of number of diamonds sold? (Do not round intermediate calculations.) b....
9. Break-Even. Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $100. The materials cost for a standard diamond is $30. The fixed costs incurred each year for factory upkeep and administrative expenses are $200,000. The machinery costs S1 million and is depreciated straight-line over 10 years to a salvage value of zero. a. What is the accounting break-even level of sales in terms of number of diamonds sold? b. What is the...
Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $100. The materials cost for a standard diamond is $40. The fixed costs incurred each year for factory upkeep and administrative expenses are $208,000. The machinery costs $1.7 million and is depreciated straight-line over 10 years to a salvage value of zero. a. What is the accounting break-even level of sales in terms of number of diamonds sold? Answer is 6,300 b. What is...
Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $120. The materials cost for a standard diamond is $40. The fixed costs Incurred each year for factory upkeep and administrative expenses are $212,000. The machinery costs $2.2 million and is depreciated straight-line over 10 years to a salvage value of zero. a. What is the accounting break-even level of sales in terms of number of diamonds sold? Break-even sales b. What is the...
Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $130. The materials cost for a standard diamond is $80. The fixed costs incurred each year for factory upkeep and administrative expenses are $206,000. The machinery costs $1.2 million and is depreciated straight-line over 10 years to a salvage value of zero. a. What is the accounting break-even level of sales in terms of number of diamonds sold? Break-even sales b. What is the...
Dime a dozen diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $100. The material cost for the standard diamond is $30$. The fixed costs for the factory and admin expenses is $200,000 a year. The machinery costs $1 million and is depreciated straight line over 10 years to a salvage value of zero. A. What is the accounting breakeven level of sales? B. What is the NPV breakeven level of Sales?
Question 29 Canyon Buff Corp. makes leather wallet. Each wallet can be sold for $100. The materials cost for a wallet is $40. The selling, general and administrative expenses are $10,000 each year. The firm needs to purchase a new piece of equipment in Year 0 before the production of wallet. The equipment costs $250,000 and is depreciated straight-line over 5 years to a salvage value of zero. For simplicity, make the following assumptions alvage vS10,000 each yes points save...
Modern company can produce handbags that will be sold for $90 each. Non-depreciation fixed costs are $1000 per year, and variable costs are $60 per unit. The initial investment of $3000 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 10%. a) What is the accounting break-even level of sales if the firm pays no taxes? b) What is the NPV break-even level of sales if the...
Nike can produce jerseys that will be sold for $76 each. Non-depreciated fixed costs are $1,040 per year and variable costs are $57 per unit. a. If the project requires an initial investment of $2,810 and is expected to last for 6 years and the firm pays no taxes, what are the accounting and NPV break-even levels of sales? The initial investment will be depreciated straight-line over 6 years to a final value of zero, and the discount rate is...
Question 30 20 points Save Answer (Hard) Canyon Buff Corp. makes leather wallet. Each wallet can be sold for S100. The materials cost for a wallet is $40. The selling, general and administrative expenses are $10,000 each year. The firm needs to purchase a new piece of equipment in Year before the production of wallet. The equipment costs $250,000 and is depreciated straight-line over 5 years to a salvage value of zero. For simplicity, make the following assumptions changes in...