For a project of six year duration and 10 per year cost of


1. For a project of six year duration and 10% per year cost of capital, what is the financial basis breakeven: Upfront cost $2,500. Unit price $30. Variable cost: $14. Fixed costs $1,200/yr. Depreciation $770/yr. Taxes 25%. Sales are the same level each year.

a. 107 units/year

b. 5 units/year

c. 68 units/year

d. 41 units/year

e. 28 units/year

2. Which of the following is the best example of scenario analysis?

a. A fisherman considering the impact of cost of bait on their profit

b. An oil firm considering the impact of oil price changes on their profit

c. A football team considering the impact of ticket purchases on their external financing required

d. A mechanic considering the impact of wages on their external financing required

e. A farmer considering the impact of weather on their profit

3. What is the cash breakeven of the following project: Unit price $20. Variable costs $12. Fixed costs $328. Depreciation $128.

a. 57 units

b. 328 units

c. 27.3 units

d. 41 units

e. 820 units

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Financial Management: For a project of six year duration and 10 per year cost of
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