# Modern Artifacts can produce keepsakes that will be sold for $70 each. Nondepreciation fixed costs are $2,000 per year and...

Modern Artifacts can produce keepsakes that will be sold for $70 each. Nondepreciation fixed costs are $2,000 per year and variable costs are $35 per unit.

a.

If the project requires an initial investment of $4,000 and is expected to last for 5 years and the firm pays no taxes. The initial investment will be depreciated straight-line over 5 years to a final value of zero, and the discount rate is 10%. What are the accounting and NPV break-even levels of sales? (Do not round intermediate calculations. Round your answers to the nearest whole number.)

Accounting break-even levels of sales units

NPV break-even levels of sales units

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b.

What will be the accounting and NPV break-even levels of sales, if the firm's tax rate is 40%? (Do not round intermediate calculations. Round your answers to the nearest whole number.)

Accounting break-even levels of sales units

NPV break-even levels of sales

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Please find attached xxxx xxx xxxxxxx and xxxxxxx solution.

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xxxxxxxxxxx cost x 50% of sales revenue |

xxxxxxxxxx additional profit xxx xx of xxxxxxxxxx xxxxx x xxxxxx |

xxxxxxxxxxxx expense = $4,000/5 x $800 xxx year |

xxxxxxxxxx xxxxx of sales x |

Fixed costing including xxxxxxxxxxxx | = | $2,000 x $800 | = xxxxx xxx year |

Additional xxxxxx from each additional dollar xx sales | xxxx |

xxxx xxxxx level corresponds to x production level of xxxxxxxxx per unit = xx xxxxxx |

xx xxxx xxx NPV xxxxxxxxxx level xx sales, first xxxxxxxxx xxxx xxxxx |

xxxx no xxxxxx Cash flow x (0.50 × xxxxxx − $2,000 |

The xxxx 5-year annuity factor xxx |

xxxxxxxxxx xx xxxxxxx NPV xxxxxx zero: |

xxxxxxx flows) − investment x 0 |

[3.79079 × (0.50 × xxxxxx − xxxxxxx − xxxxxx x x |

xxxxxxxxx × xxxxxx − xxxxxxx − xxxxxx - - - more text follows - - - |

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xxxxxx Artifacts xxx produce xxxxxxxxx xxxx will xx sold for $70 each. Non depreciation fixed costs are xxxxxx xxx year xxx variable xxxxx xxx xxx xxx unit.

xx

xx xxx xxxxxxx xxxxxxxx xx initial investment xx $4,000 and xx xxxxxxxx xx last xxx x years and the xxxx xxxx no xxxxxx xxx initial investment will xx xxxxxxxxxxx straight-line xxxx x xxxxx to a xxxxx xxxxx of xxxxx xxx xxx xxxxxxxx xxxx is xxxx What xxx the accounting xxx xxx break-even levels of xxxxxx (Do xxx round xxxxxxxxxxxx xxxxxxxxxxxxx Round xxxx xxxxxxx to xxx xxxxxxx xxxxx number.)

xxxxxxxxxxxxxxxx 0 | xxxxx | 1 | |

Year1 | xxx | 0.9091 | |

xxxxx | 800 | xxxxxx | |

Year x | 800 | xxxxxx | |

Year 4 | 800 | 0.6830 | |

Year x | 800 | xxxxxx |

Accounting xxxxxxxxxx xxxxxx of sales

xxx xxxxxxxxxx xxxxx xx sales xx the xxxxx point at

- - - more text follows - - -

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