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Financial break even quantity

Consider a project with the following data: accounting break-even quantity = 30,000 units; cash break-even quantity = 16,500 units;life = 6 years; fixed costs = $210,000; variable costs = $29 per unit; required return = 14 percent. Ignoring the effect of taxes, the financial break-even quantity is units. (Round your answer to 2 decimal places, e.g. 32.16.)

Q=Fix costs+Operating cashflow/price (unit)-variable costs unit

Solution Preview

Consider a project with the following data:

accounting break-even quantity = 30,000 units;
cash break-even quantity = 16,500 units;
life = 6 years;
fixed costs = $210,000;
variable costs = $29 per unit;
required return = 14 percent. Ignoring the effect of taxes, the financial break-even quantity is units. (Round your answer to 2 decimal places, e.g. 32.16.)

Q = Fixed costs + Operating cashflow/price (unit) - variable costs (unit)

Cash break-even ...

Solution Summary

This solution is comprised of a detailed explanation to answer how much is the financial break-even quantity.

$2.19