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Cash BE? for base case Fed Ex is considering a new product launch. The project will cost $750,000, have a 10-year life and be depreciated
Cash BE? for base case Fed Ex is considering a new product launch. The project will cost $750,000, have a 10-year life and be depreciated (straight-line) to zero. Sales are projected at 100 units per year, unit price will be $10,000, unit variable costs will be $5,000, and fixed costs will be $250,000 per year. The tax rate is 21%. Based on experience, you think unit sales, unit price, variable cost, and fixed cost projections are accurate within 10%. Assume a project cost of capital of 12%. E. For the base case, what is the cash breakeven sales level (ignoring taxes)? Round to the nearest unit
Cash BE? for base case
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