L.J.'s Toys Inc. just purchased a $280,000 machine to produce toy cars. The machine will be...
L.J.'s Toys Inc. just purchased a $280,000 machine to produce toy cars. The machine will be fully depreciated by the straight-line method over its five-year economic life. Each toy sells for $20. The variable cost per toy is $8, and the firm incurs fixed costs of $358,000 each year. The corporate tax rate for the company is 31 percent. The appropriate discount rate is 9 percent. What is the financial break-even point for the project?
Homework Answers
![financial break even point: OCF = $71,985.89 PMT(9%,5,-280000) Depreciation 56000 BREAK EVEN [ 280000/5] = FC+(OCF-TX D/1-T)/](http://img.homeworklib.com/questions/9c4e7400-7a7c-11ea-93fd-c7b8d64d5e20.png?x-oss-process=image/resize,w_560)
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