1. Your uncle is considering investing in a new company that will produce high quality stereo speakers. The sales price would be set at 1.5 times the variable cost per unit; the variable cost per unit is estimated to be $60.00; and fixed costs are estimated at $1,000,000. What sales volume would be required to break even, i.e., to have EBIT = zero?
A. 25000 B. 33333.33 C. 16666.67 D. 32054.18 E. 15697.43
2. Blanchford Enterprises is considering a project that has the following cash flow data. What is the project's IRR? Year: 0 1 2 3 Cash flows: -$1,000 $400 $400 $400
A. 21.09%
B. More information is needed to calculate IRR.
C. 9.70%
D. 20.00%
E. 6.67%