J.L\'s Toys Inc. just purchased a $270,000 machine to produce toy cars. The mach

Question

J.L's Toys Inc. just purchased a $270,000 machine to produce toy cars. The machine will be fully depreciated by the straight-line method over its five-year economic life. Each toy sells for $22. The variable cost per toy is $9, and the firm incurs fixed costs of $342,000 each year. The corporate tax rate for the company is 32 percent. The appropriate discount rate is 9 percent. Required: What is the financial break-even point for the project? (Round your answer to the nearest whole number. (e.g., 32))

Explanation / Answer

Breakeven Point Q = F / (P

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