A project has the following estimated data: price = $89 per unit; variable costs = $48.06 per unit; fixed costs = $7,800; required return = 10 percent; initial investment = $12,000; life = six years. Ignore the effect of taxes.
Required:
(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?