Kurt's Interiors Is Considering a Project with a Sales Price

question 4

Multiple Choice

Kurt's Interiors is considering a project with a sales price of $11,variable cost per unit of $8.50,and annual fixed costs of $134,500.The tax rate is 23 percent and the discount rate is 14 percent.The project requires $224,000 of fixed assets that will be worthless at the end of the 4-year project.What is the present value break-even point in units per year if the firm uses straight line depreciation?

• A)88,808
• B)92,480
• C)93,057
• D)93,750
• E)87,046

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Definitions:

Statement Of Cash Flows

Statement showing the sources and uses of cash during a period of time.

Cash Receipts

The collection of money, including coins, notes, electronic payments, and checks, received by a business during a given period.

Cash Payments

Transactions in which the payment for goods or services is made with physical currency or through an equivalent electronic form.

Not-for-Profit Sector

The not-for-profit sector comprises organizations that are aimed at serving the public interest or a specific social cause without seeking to make a profit for their owners or members.