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Use straight line depreciation instead of $140

3. (20 points) The Ons Company has the following cost information on its new project: Initial investment: $700 Fixed costs are $200 per year Variable costs: $3 per unit Depreciation: $140 per year Price: $8 per unit Discount rate: 12% Project life: 3 years Tax rate: 34% a) Calculate the accounting and financial break-even quantities. b) Draw on a graph how the accounting and financial break-even quantity would change as the price changes? (That is, calculate how Qbreak-even would change as a function of price for both accounting and financial break even points. You can use two separate graphs or have them on the same graph.) 3. (20 points) The Ons Company has the following cost information on its new project: Initial investment: $700 Fixed costs are $200 per year Variable costs: $3 per unit Depreciation: $140 per year Price: $8 per unit Discount rate: 12% Project life: 3 years Tax rate: 34% a) Calculate the accounting and financial break-even quantities. b) Draw on a graph how the accounting and financial break-even quantity would change as the price changes? (That is, calculate how Qbreak-even would change as a function of price for both accounting and financial break even points. You can use two separate graphs or have them on the same graph.)

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