Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $120. The materials cost

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answerhappygod
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Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $120. The materials cost

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Dime a Dozen Diamonds makes synthetic diamonds by treatingcarbon. Each diamond can be sold for $120. The materials cost for astandard diamond is $60. The fixed costs incurred each year forfactory upkeep and administrative expenses are $204,000. Themachinery costs $1.5 million and is depreciated straight-line over10 years to a salvage value of zero.
a. What is the accounting break-even levelof sales in terms of number of diamonds sold? (Do notround intermediate calculations.)
b. What is the NPV break-even level ofdiamonds sold per year assuming a tax rate of 21%, a 10-yearproject life, and a discount rate of 10%? (Do notround intermediate calculations. Round your answer to the nearestwhole number.)
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