Question
Determine the sales of the Lock-Awn (in units and revenue) needed to break even and the payback period for the initial capital investments, for both
Determine the sales of the Lock-Awn (in units and revenue) needed to break even and the payback period for the initial capital investments, for both the more-for-more and more-for-less niche. (Hint: Assume the Reynolds borrow $200,000 at 8% interest to be paid back in two annual Payments. Further assume that the Reynolds incur maximum marketing expenses. For Breakeven analysis, use straight-line depreciation method over 3, 5, and 7 years, respectively, for mold and tooling, office equipment, and assembly and packing equipment.) What is the impact on break-even if sales are higher than expected by 25%? Lower by 25%? What is the impact on break-even if sales are higher than expected by 50%? Lower by 50%? How likely is it that EMR Innovations can break even and recover its investment costs?
-one-time investment of $40,000 for mold and tooling.
-material cost for each unit was $5.95
-packaging cost per unit, $0.75
-Labor cost per unit, $5.90
-costs for packaging and assembly equipment $3,500
-office equipment $1000
-Liability insurance $5,000
- building lease $1,500
commercial insurance $1,000
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