Wettway Sailboat Corporation is considering whether to launch its new Margo-class sailboat. The selling price will be $59,000 per boat. The variable costs will be about half that, or $38,000 per boat, and fixed costs will be $645,000 per year. The total investment needed to undertake the project is $4,900,000. This amount will be depreciated straight-line to zero over the 6-year life of the equipment. The salvage value is zero, and there are no working capital consequences. Wettway has a required return of 20 percent on new projects. Q =FC +OCF−TC×D1−TCP−v Q = FC + OCF − T C × D 1 − T C P − v Use the above expression to find the cash, accounting, and financial break-even points for Wettway Sailboat. Assume a tax rate of 24 percent. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Cash break-even?
Accounting break-even?
Financial break-even?
Wettway Sailboat Corporation is considering whether to launch its new Margo-class sailboat. The selling price will be $59,000 per boat. The variable costs will be about half that, or $38,000 per boat,...
Wettway Sailboat Corporation is considering whether to launch its new Margo-class sailboat. The selling price will be $49,000 per boat. The variable costs will be about half that, or $28,000 per boat, and fixed costs will be $545,000 per year. The total investment needed to undertake the project is $3,900,000. This amount will be depreciated straight-line to zero over the 7-year life of the equipment. The salvage value is zero, and there are no working capital consequences. Wettway has a...
Wettway Sailboat Corporation is considering whether to launch its new Margo-class sailboat. The selling price will be $57,000 per boat. The variable costs will be about half that, or $36,000 per boat, and fixed costs will be $625,000 per year. The total investment needed to undertake the project is $4,700,000. This amount will be depreciated straight-line to zero over the 6-year life of the equipment. The salvage value is zero, and there are no working capital consequences. Wettway has a...
Wettway Sailboat Corporation is considering whether to launch its new Margo-class sailboat. The selling price will be $48,000 per boat. The variable costs will be about half that, or $27,000 per boat, and fixed costs will be $535,000 per year. The total investment needed to undertake the project is $3,800,000. This amount will be depreciated straight-line to zero over the 6-year life of the equipment. The salvage value is zero, and there are no working capital consequences. Wettway has a...
Problem 11-25 Break-Even and Taxes [LO3] Wettway Sailboat Corporation is considering whether to launch its new Margo-class sailboat. The selling price will be $53,000 per boat. The variable costs will be about half that, or $32,000 per boat, and fixed costs will be $585,000 per year. The total investment needed to undertake the project is $4,300,000. This amount will be depreciated straight-line to zero over the 5-year life of the equipment. The salvage value is zero, and there are no...
Problem 11-25 Break-Even and Taxes [L03] Wettway Sallboat Corporation is considering whether to launch its new Margo-class sallboat. The selling price will be $43,000 per boat. The vartable costs will be about half that, or $22,000 per boat, and fixed costs will be $485.000 per year. The total Investment needed to undertake the project is $3,300.000. This amount will be depreclated straight-line to zero over the 7-year life of the equipment. The salvage value is zero, and there are no...
Can you answer/correct the cash break-even and financial break even portion please. Wettway Sailboat Corporation is considering whether to launch its new Margo-class sailboat. The selling price will be $50,000 per boat. The variable costs will be about half that, or $29,000 per boat, and fixed costs will be $555,000 per year. The total investment needed to undertake the project is $4,000,000. This amount will be depreciated straight-line to zero over the 5-year life of the equipment. The salvage value...