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8. Spencer Tools would like to offer a special product to its best customers. It requires $55,000 of investment for new equipment. The fixed costs
8. Spencer Tools would like to offer a special product to its best customers. It requires $55,000 of investment for new equipment. The fixed costs are estimated at $21,000. The product sells for $22.50 per unit and variable cost is $10 per unit.
a) Using a 5-year depreciation schedule, whats the depreciation?
b) What is the accounting breakeven units?
c) Whats the cash break-even units?
d) Whats the financial breakeven units?
e) Whats the OCF (payment) when NPV =0?
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