Finance Assignment | Professional Writing

Busines 3 Jaspent Pandra 125. Modern Artifacts can produce keepsakes that will be sold for 580 each. Non depreciation fixed costs are $1,000 per year and variable costs are $60 per unit. If the project requires an initial investment of $3,000 and is expected to last for 5 years and the firm pays no taxes, what are the accounting and economic break-even levels of sales? The initial investment will be depreciated straight-line over 5 years to a final value of zero, and the discount rate is 10 percent. 119.

Beryl expects her sales to increase by 20 percent next year. If this year’s sales are $500,000 and the degree of operating leverage (DOL) is 1.4, what is the expected level of operating income (EBIT) for next year if this year’s EBIT is $100,000? 114. Calculate the accounting break-even point for the following firm: revenues of $700,000, $100,000 fixed costs, $75,000 depreciation, 60 percent variable costs, and a 35 percent tax rate. What happens to the break-even if a trade-off is made which increases fixed costs by $30,000 and decreases variable costs to 55 percent of sales?

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