Essay
If a firm tax rate is 40 percent what would your answer be? Now taxes are 40 percent of profits.Accounting break-even is unchanged,since taxes are zero when profits = 0.
To find NPV break-even,recalculate cash flow.
CF = (1 - T)(Revenue - Cash Expenses)+ T × Depreciation
= .60 (.25 × Sales - 2000)+ .40 × 600
= .15 × Sales - 960
Correct Answer:
Verified
The annuity factor is 3.7908,s...View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Correct Answer:
Verified
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q12: An 8 year project is estimated to
Q19: What is the effect on break-even level
Q23: The NPV break-even level of sales will
Q41: What percentage change in sales occurs if
Q45: What happens to the NPV of a
Q52: The degree of operating leverage shows the
Q74: The opportunity to alter production technology gives
Q79: Operating leverage increases with fixed cost.
Q109: What is the NPV break-even level of
Q118: One characteristic of scenario analysis is that:<br>A)it