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Lowell Tech has just purchased a $510,000 machine to produce gadgets. The machine will be fully depreciated by the straight-line method over its six-year economic
Lowell Tech has just purchased a $510,000 machine to produce gadgets. The machine will be fully depreciated by the straight-line method over its six-year economic life. Each gadget sells for $37. The variable cost per gadget is $22, and the firm incurs fixed costs of $400,000 each year. The corporate tax rate for the company is 25%. The appropriate discount rate is 10%. What is the financial break-even point for the project (i.e., the quantity for financial break-even)?
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