Anna's Automation Ltd. sells industrial robots for $100,000, The firm's fixed costs are $2,000,0000, 50 units are

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Anna's Automation Ltd. sells industrial robots for $100,000, The firm's fixed costs are $2,000,0000, 50 units are sold each year, profits total $500,000. The firm's assets (all equity financed) are $5 million.

The Anna plans to invest an additional $4 million in new plant capacity, but this investment will have the following costs:

1. Add $500,000 to fixed overheads

2. Reduce variable costs by $10,000

3. Increase output by 20 units

4. Reduce the selling price to $80715 on all units sold.

By how many units will the break-even volume increase?

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Corporate Finance A Focused Approach

ISBN: 978-1439078082

4th Edition

Authors: Michael C. Ehrhardt, Eugene F. Brigham

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Question Posted: Jan 08, 2013 05:55 AM

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Anna's Automation Ltd. sells industrial robots for $100,000, The firm's fixed costs are $2,000,0000, 50 units are

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Computation of the Break Even Point Old Project 50 units New Project2050 Particulars Per Unit Total ...View the full answer

Corporate Finance A Focused Approach

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