Question about Break-Even Analysis

timer Asked: Feb 12th, 2015

Question Description

I need help with a Accounting question. All explanations and answers will be used to help me learn.

(Break-even analysis)The Marvel Mfg. Company is considering whether or not to construct a new robotic production facility. The cost of this new facility is


and it is expected to have a six-year life with annual depreciation expense of


and no salvage value. Annual sales from the new facility are expected to be


units with a price of


per unit. Variable production costs are


per unit, and fixed cash expenses are


per year.

a.Find the accounting and the cash break-even units of production.

b.Will the plant make a profit based on its current expected level of operations?

c.Will the plant contribute cash flow to the firm at the expected level of operations?

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