Problem:
A project has the following estimated data: price = $59 per unit; variable costs = $31.27 per unit; fixed costs = $5,200; required return = 12 percent; initial investment = $8,000; life = three years. Ignore the effect of taxes.
Required:
Question 1: What is the accounting break-even quantity?
Question 2: What is the cash break-even quantity?
Question 3: What is the financial break-even quantity?
Question 4: What is the degree of operating leverage at the financial break-even level of output?
Note: Please explain comprehensively and give step by step solution.