Hester Industries is evaluating a project that will require a $3.3 million inves

Question

Hester Industries is evaluating a project that will require a $3.3 million investment and will last for six years. The new project will require $1,125,000 in annual fixed costs, and variable costs will account for 75.15% of sales revenue. The firm's tax rate is 40% and the project's discount rate is 10.9%. What is the project's accounting break-even level of sales? $6,862,745 $6,969,697 $6,808,943 $7,040,816 $6,740,443 By how much does accounting depreciation understate the true cost of the project's investment?

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