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ABC Ltd is considering whether or not to launch its product. The product selling price is expected to be 4 0 per unit and variable

ABC Ltd is considering whether or not to launch its product. The product selling price is expected to be 40 per unit and variable cost of 20 per unit. THe fixed cost is 500 per year. Total investment needed for the project is 3500. The amount will be depreciated by straight line to zero over the 5 years life of the equipment. The salvage value is zero and there are no working capital consequences. The required rate of return is 20% on new project, Total unit produced in 5 years is 425 and yearly production is 85 units and tax rate is 34%. Q1) The operating cash flow for the project is : a)3400 b)1170 c)1700 d)2200 Q2) THe financial break even quantity is: a)84 b)170 c)85 d)110(Please solve using concepts of economics and finance with all steps shown)

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