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26. Tesla has purchased a $200,000 machine to produce toy cars. The machine will be fully depreciated by the straight-line method for its economic life
26. Tesla has purchased a $200,000 machine to produce toy cars. The machine will be fully depreciated by the straight-line method for its economic life of five years and will be worthless after its life. The firm expects that the sales price of the each toy car is $25 while its variable cost is $5. The firm should also pay $350,000 as fixed costs each year. The corporate tax rate for the company is 25 percent, and the appropriate opportunity cost of capital is 12 percent. What is the break-even point using the finance approach
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