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A company with a newly developed product believes that they can sell 100,000 units of this product per year for $ 90 / piece. The
A company with a newly developed product believes that they can sell 100,000 units of this product per year for $ 90 / piece. The payments per piece for material, salary, etc. are calculated at $ 50 / piece regardless of the amount. The investment cost is $ 1,000,000, the residual value is 0 and the economic life is 5 years. There is an uncertainty associated with input parameters and the company therefore wants to know the lowest sales volume per year where the investment is not unprofitable if the discount rate is 10%.
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