Question
Peloton is investing in a new factory to manufacture their exercise bikes which has an initial investment of $20 million depreciated over its useful life
Peloton is investing in a new factory to manufacture their exercise bikes which has an initial investment of $20 million depreciated over its useful life of ten years to a salvage value of $10 million. The price of the product is $3,000 and the company has a variable cost per unit of $1,000. Given annual fixed costs of $2 million and a discount rate of 15%, the operating cash flow that results in a zero NPV is _________. Based on this value of operating cash flow, the financial break-even quantity is _________.
Group of answer choices
A. $3,985,041.30; 1,993
B. $3,195,229.41; 2,598
C. $3,985,041.30; 3,985
D. $3,985,041.30; 2,993
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