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Question(s) / Instruction(s):

A project has the following estimated data: price = $95 per unit; variable costs = $48.45 per unit;fixed costs = $7,700; required return = 18 percent; initial investment = $12,000; life = three years.

Required:

1.            the accounting break-even quantity is   units.

2.            The cash break-even quantity is   units.

3.            The financial break-even quantity is   units.

4.            The degree of operating leverage at the financial break-even level of output is  .

 

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