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KT Televisions, a US firm, has a Chinese subsidiary that manufactures and sells TVs in China. The main input is priced in USD (USD100/unit) All
KT Televisions, a US firm, has a Chinese subsidiary that manufactures and sells TVs in China.
- The main input is priced in USD (USD100/unit)
- All other costs are in CNY (Fixed cost=CNY4M, Variable cost= CNY400/unit).
- Depreciation = CNY1M
- S0 = CNY6/USD
- Expects to sell 6,000 TVs this year at CNY2,000 each.
- Tax rate=30%; assuming tax credits are available for immediate use if losses occur.
How many unit KT Televisions needs to sell to break-even in operating cash flows in dollars?
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