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A company generates $ 5 , 0 0 0 , 0 0 0 in sales units sold at a price of $ 5 per unit
A company generates $ in sales units sold at a price of $ per unit Its variable costs equal percent of sales $ per unit its fixed costs are $ its interest expense is equal to $ its tax rate is equal to and it has shares of common stock outstanding. The firm is considering a new type of machine for its existing production lines. With the new machine, fixed costs would increase to $ but variable costs would decrease to $ per unit and interest expense would increase to $ One key benefit is that the company can then lower its price by $ per unit that is a price of $ per unit and this would likely double its sales to units. What are the EBIT breakeven volume and the Net Income breakeven volume if they change from the existing machine to the new machine? Sample income statements are provided below as an aid. You are not required to use them.
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