A project has the following estimated data: price = $79 per unit; variable costs = $41.87 per unit; fixed costs = $6,900; required return = 9 percent; initial investment = $10,000; life = six years. Ignore the effect of taxes.
a. What is the accounting break-even quantity? b. What is the cash break-even quantity? c. What is the financial break-even quantity?
d. What is the degree of operating leverage at the financial break-even level of output?