Problem 10-10 Break-Even (LO2) Dime a Dozen Diamonds makes synthetic diamon

Problem 10-10 Break-Even (LO2)

Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $140. The materials cost for a standard
diamond is $40. The fixed costs incurred each year for factory upkeep and administrative expenses are $216000. The machinery costs $2.5
million and is depreciated straight-line over 10 years to a salvage value of zero.

What is the accounting break-even level of sales in terms of number of diamonds sold?

What is the NPV break-even level of sales assuming a tax rate of 35% a 10-year project life and a discount rate of 12%? (Do not
round intermediate calculations. Round your answer to the nearest whole number.)

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