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Pecan Leisure, Inc. makes wooden croquet sets suitable for sale at discount stores. Each set can be sold to a sporting goods distributor for $35.
Pecan Leisure, Inc. makes wooden croquet sets suitable for sale at discount stores. Each set can be sold to a sporting goods distributor for $35. The variable cost of producing each set is $21. The company's cash-based fixed costs (such as managers' salaries, building rent, some components of utilities and insurance) total $5,450,000 per year. The machinery used in the manufacturing originally cost the company 7,200,000, and was expected to have a 9-year useful life. Pecan's managers feel that the weighted average cost of capital for the company's typical investment projects is 7,4% per year. What number of sets sold constitutes the companys annual Financial Break-Even Point? (in previous question 10 you computed the annual Operating or Accounting Break. Even Point.] A. 469,570.07 B. 309,001.36 C. 48,770.96 D. 479,464.29 E. 141,055.14
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