A 3-year project requires an initial investment in equipment of $7,700 which can then be amortized straight-line to zero over the life of the project. The project will increase annual sales units by 1700 and sales revenue by $60,000. Total variable cost will increase by $33,000 and fixed costs by $4,200. The required rate of return on the project is 10.60%. What minimum annual level of sales revenue must be achieved to break-even from an accounting perspective?

Question 10Answer

a.$9,333

b.$6,222

c.$26,444

d.$39,667

e.$15,037