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  • June 2019 - Tutorial-FIN544 - Nur Shazleen Afina

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    Nur Shazleen Afina
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    1) The document presents calculations to determine the break-even point in units and cash for a project with revenues of $20,000 per unit, variable costs of $16,000 per unit, fixed costs of $130,000, depreciation of $160,000 over 5 years, and a corporate tax rate of 35%. 2) The break-even point in units is calculated to be 47.13 units and the break-even point in cash is calculated to be 7.13 units. 3) Both calculations involve setting operating cash flow equal to 0 and solving for the quantity of units.

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    June 2019_Tutorial-FIN544_Nur Shazleen Afina

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    1) The document presents calculations to determine the break-even point in units and cash for a project with revenues of $20,000 per unit, variable costs of $16,000 per unit, fixed costs of $130,000, depreciation of $160,000 over 5 years, and a corporate tax rate of 35%. 2) The break-even point in units is calculated to be 47.13 units and the break-even point in cash is calculated to be 7.13 units. 3) Both calculations involve setting operating cash flow equal to 0 and solving for the quantity of units.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    20 views2 pages

    June 2019 - Tutorial-FIN544 - Nur Shazleen Afina

    Uploaded by

    Nur Shazleen Afina
    1) The document presents calculations to determine the break-even point in units and cash for a project with revenues of $20,000 per unit, variable costs of $16,000 per unit, fixed costs of $130,000, depreciation of $160,000 over 5 years, and a corporate tax rate of 35%. 2) The break-even point in units is calculated to be 47.13 units and the break-even point in cash is calculated to be 7.13 units. 3) Both calculations involve setting operating cash flow equal to 0 and solving for the quantity of units.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 2

    10 800 , 000 R21 , 000

    T
    =

    Sp = 20 , 000 VC = 11, 000


    a 250 curts Fe Ru1s0
    , 000 soo ,
    005 years
    = =

    & & =
    M160, 000

    depreciation
    RR =
    18
    % (0 .
    8) T = 25
    % (0 25) .

    /
    ·
    O

    i)
    Accounting Break-even : ofF =

    Depreciation
    OCF = ((SP-VC)Q-Fc](1 -
    + ) + D(T)
    4 , 000 0 -
    65 76 , 000
    160 , 000 =
    /(20 , 000 -
    16 , 000) Q -130 , 000] (1-0 25) + 160 , 000 (0 35)
    .
    .

    84 , 500 -
    28 , 500
    160 , 000 = 41000(Q) -
    120 , 000 (0 65) .

    + 46 , 000

    => 188 , 500/4 , 000


    & T47 13 .

    units

    Cash Break-even : oct = 0

    OCF =
    [Csp-Ve)a-FC] (l-T) + DCT)
    0 =
    /(20 , 000 -
    16 , 000) Q -130 , 000) (1-0 35) + 160 , 000 (0 . .

    35)
    =>
    4 , 000 (Q) -

    120 , 000 (0 65) + 56 , .


    000

    = 28 , 500/4 , 000
    Q =
    7 13
    .

    cits

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