A Project Requires an Initial Equipment Purchase of $480,000, Which

question 238

Multiple Choice

A project requires an initial equipment purchase of $480,000, which will be depreciated straight- line to zero over the life of the project. The equipment will have no salvage value. Annual fixed
Costs are projected at $266,800. The selling price per unit is $9.90 with a variable cost per unit of
$6) 65. The project has a 6-year life and a required rate of return of 12%. What is the accounting
Break-even quantity if taxes are ignored?

• A) 82,092
• B) 91,538
• C) 106,708
• D) 109,813
• E) 112,634

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Definitions:

Financial Security

The state of having enough resources to cover living expenses and unforeseen emergencies, without constant worry about money.

Crystallized Intelligence

The ability to use learned knowledge and experience.

Fluid Intelligence

Mental flexibility; the ability to process information rapidly.

Susceptible

Likely or liable to be influenced or harmed by a particular thing.