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( CHAPTER 7 ) Tree house clipartA company is considering the opportunity to invest into a new 8 - year project: manufacturing and selling remote

(CHAPTER 7)
Tree house clipartA company is considering the opportunity to invest into a new 8-year project: manufacturing and selling remote-controlled tree houses. $330,000 would need to be spent upfront to cover the cost of buying the necessary production equipment, which will be depreciating at a constant rate each year over its 8-year economic life. The equipment will be worthless when the project ends.
Additional information regarding the tree houses production:
$2,600 in per-tree-house costs, a.k.a. variable cost of production
$40,000 in total (i.e., not per tree house) annual fixed production costs
Each sold tree house is estimated to bring the company $3,500.
The tax rate of 28% applies to the company's taxable income each year. This project requires a 9% annual rate of return.
Answer the following:
If the company manufactures and sells
[ Select ]
tree houses each year, then it will break even in the "financial" sense. However, if the cost of buying the necessary production equipment turns out lower, the required annual break-even number of sold tree houses would need to be
[ Select ]
.

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