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ABC Corp. now proposes to invest 3 million in a new tour package project. Fixed costs per year are 1 million. The tour package costs
- ABC Corp. now proposes to invest 3 million in a new tour package project. Fixed costs per year are 1 million. The tour package costs 500 and can be sold at 1500 per package to tourists. Based on the products expected attractiveness, this tour package will be available to customers for the next five years. Assume that the cost of capital is 20%.
- What is the accounting break-even point in number of tourists per year? Assume no taxes and a straight-line depreciation.
[5 marks]
- What is the NPV break-even point in number of tourists per year? Assume no taxes and a straight-line depreciation.
[5 marks]
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