Ayden's Toys, Incorporated, purchased a $485,000 machine to produce toy cars. The Machine Will be fully depreciated by the Straight-line method over its five-year economic life. Each tay sells for $19. The variable cost per toy is $6 and the firm incurs fixed Cost of $310,000 per year. The Corporate tax rate for the company is 24 percent. The appropiate discount rate is 12 percent. What is the financial break-even point for the project? Financial Break-Even point = Fixed cost + Depreciation Depreciation: Initial Investment Useful life स. Sales Price-Variable costs 485.000 5 310,000 + 97,000 - 407000 91,000 19-6 13 12 12(1+12) 5 000,068 861 000,068 es 000 rec P PC 008 HO

Ayden's Toys, Incorporated, purchased a $485,000 machine to produce toy cars. The Machine Will be fully depreciated by the Straight-line method over its five-year economic life. Each tay sells for $19. The variable cost per toy is $6 and the firm incurs fixed Cost of $310,000 per year. The Corporate tax rate for the company is 24 percent. The appropiate discount rate is 12 percent. What is the financial break-even point for the project? Financial Break-Even point = Fixed cost + Depreciation Depreciation: Initial Investment Useful life स. Sales Price-Variable costs 485.000 5 310,000 + 97,000 - 407000 91,000 19-6 13 12 12(1+12) 5 000,068 861 000,068 es 000 rec P PC 008 HO

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 4P

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