6. You are evaluating a project that will require an investment
of $15 million that will be depreciated over a period of 19
years. You are concerned that the corporate tax rate will
increase during the life of the project.
Would this increase the accounting break-even point?
Would it increase the NPV break-even point?
7. Modern Artifacts can produce keepsakes that will be sold for $60
each. Nondepreciation fixed costs are $3,000 per year, and variable
costs are $30 per unit. The initial investment of $3,000 will be
depreciated straight-line over its useful life of 5 years to a final value of
zero, and the discount rate is 10%.
What is the accounting break-even level of sales if the firm pays no
(Do not round intermediate calculations. Round
your answer to the nearest whole number.)