A proposed project has fixed costs of 3600 depreciation expense of 1500 and a

# A proposed project has fixed costs of 3600

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69.A proposed project has fixed costs of \$3,600, depreciation expense of \$1,500, and a sales quantity of 1,300 units. What is the contribution margin if the projected level of sales is the accounting break-even point? A.\$3.92B. \$4.14C. \$4.50D. \$4.80E. \$5.00AACSB: Analytical ThinkingAccessibility: Keyboard NavigationBlooms: ApplyDifficulty: 1 BasicRoss - Chapter 07 #69Section: 7.1Topic: Break-even analysis
70.A proposed project has a contribution margin of \$5, fixed costs of \$12,000, variable costs per unit of \$12, depreciation of \$30,000, an EAC of \$41,185 and a tax rate of 35 percent. What is the present value break-even point in units per year? AACSB: Analytical ThinkingAccessibility: Keyboard NavigationBlooms: AnalyzeDifficulty: 2 IntermediateRoss - Chapter 07 #70Section: 7.1Topic: Break-even analysis 71.Thompson’s has determined that a new project is expected to have fixed costs of \$132,378, a contribution margin of \$36.20, and a tax rate of 34 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. The EAC should be based on 5 years at 15 percent. What is the expected present value break-even point in units per year? AACSB: Analytical ThinkingAccessibility: Keyboard NavigationBlooms: AnalyzeDifficulty: 3 ChallengeRoss - Chapter 07 #71Section: 7.1Topic: Break-even analysis 72.Kurt’s Interiors is considering a project with a sales price of \$11, variable cost per unit of \$8.50, and fixed costs of \$134,500. The tax rate is 35 percent and the applicable 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? AACSB: Analytical ThinkingAccessibility: Keyboard NavigationBlooms: AnalyzeDifficulty: 3 ChallengeRoss - Chapter 07 #72Section: 7.1Topic: Break-even analysis 73.At Stage 2 of the decision tree it shows that if a project is successful, the payoff will be \$53,000 with a 2/3 chance of occurrence. There is also the 1/3 chance of a \$24,000 payoff. The cost of getting to Stage 2 (1 year out) is \$24,000. The cost of capital is 15 percent. What is the NPV of the project at Stage 1? A. \$349.16B.\$231.88C. \$108.17D. \$133.33E. \$147.59AACSB: Analytical ThinkingAccessibility: Keyboard NavigationBlooms: ApplyDifficulty: 2 Intermediate Ross - Chapter 07 #73 Section: 7.4 Topic: Decision trees
74.The Quick-Start Company has the following pattern of potential cash flows for a new project.

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