Break-Even Point Original price per unit $95,000 Fixed costs $2,000,000 Number of units produced and sold annually 50 Total annual profits $400,000 Firm's total assets $4,000,000 % of assets equity financed 100% Change in production process: Additional investment $3,000,000 Additional fixed costs $360,000 Reduction in variable cost per unit $12,000 Increase in units of output 23 Price to sell all units $84,000 Tax rate 0% Cost of equity 15.00% % of debt used 0% Calculate incremental profit: Formulas Step 1: Determine current variable cost per unit, V #N/A Step 2: Determine new profit level if production process changed #N/A Step 3: Calculate incremental profit #N/A Approximate rate of return on new investment