Thompson's has determined that a new project has expected fixed costs of $132,378, a contribution margin of $36.20, and a tax rate of 21 percent. The investment has an initial cost of $548,000 that will be depreciated straight-line to zero over the 5-year life of the project. At what sales quantity per year will the investment break even on a financial basis if the required return is 15%?
Thompson's has determined that a new project has expected fixed costs of $132,378, a contribution margin of $36.20, and a tax rate of 21 percent. The investment has an initial cost of $548,000 that will be depreciated straight-line to zero over the 5-year life of the project. At what sales quantity per year will the investment break even on a financial basis if the required return is 15%?
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 13P
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Thompson's has determined that a new project has expected fixed costs of $132,378, a contribution margin of $36.20, and a tax rate of 21 percent. The investment has an initial cost of $548,000 that will be
At what sales quantity per year will the investment break even on a financial basis if the required return is 15%?
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