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A production manager has obtained the following estimated costs/revenues for producing a new orbital impact wrench. Their plan is to produce that particular model wrench
A production manager has obtained the following estimated costs/revenues for producing a new orbital impact wrench. Their plan is to produce that particular model wrench for at least 6 years. Yearly Sales = 6,504 units/year Sales Price = $500/unit Variable Cost = $355/unit (no learning is involved) Initial Investment = $1,000,000 Annual maintenance = $200,000 (to refresh tools after each 12-months of use) MARR = 15.9312% (2) A.1. Does the company break even during year 1, Yes or No? (2) A.2. How many units does it take the company to make/sell to break-even the first time? (3) A.3. How much total profit does the company make over the 6-year period? (2EC) EC. Calculate the NPV for the project over the 6-year period
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