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Imagine a start - up company producing a new prodct: The sale price of the product is 3 5 0 0 0 TL / kg

Imagine a start-up company producing a new prodct: The sale price of the product is 35000 TL/kg. The design capacity is 5000 ton/year. The fixed capital investment is 1010 TL. Straight line depreciation may be applied for the project life of 10 years to zero salvage value. All other fixed charges are 2\times 109 TL/year. Variable cost except for the raw material cost is 15000 TL/kg.
a- What must be the price of raw material (TL/kg) at a full capacity to get 25% return on investment? Assume the tax ratio is 40%.(20)
b- Use the raw material price you calculated in part (a) to determine the capacity at the breakeven point. (20)

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