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A group of venture investors is considering putting money into Lemma Books, which wants to produce a new reader for electronic books. The variable cost
A group of venture investors is considering putting money into Lemma Books, which wants to produce a new reader for electronic books. The variable cost per unit is estimated at $200, the sales price would be set at 1.4 times the VC/unit ( P = 1.4*VC), and fixed costs are estimated at $750,000 per year.
a. Find the break-even quantity
b. The investors will put up the funds if the project is likely to have a profit of $500,000 or more. What sales volume (quantity) would be required in order to meet the minimum profit goal
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