Q$29.$ Assume we have a following project:

Net cost of new equipment $ $1,100,000$

Life of new equipment $10$ years

No Salvage value

Straight line depreciation

Forecasted sales volume $9,000$ units per year

Expected sales price of new product $ $58$ per unit

Variable cost of production $ $28$ per unit

Fixed operating costs $($excluding depreciation$)$ $ $155,000$ per year

Taxes are $30\%$ and the cost of capital is $15\%$

Your financial analyst calculated the break$-$even sales to be $8,833\mathrm{.}3$ units $($trust him, it is correct$).$ He says

that since sales are expected to be $9,000$ units and because the project is expected to generate net

income of $ $30,000$ a year, it should be accepted.

Revenue at $90,000$ units $$522,000$

less: variable costs $252,000$

fixed costs $155,000$

depreciation $110,000517,000$

gross income $5,000$

taxes $1,500$

Net Income $ $3,500$

c$.$If you feel that $8,833$ units is not the appropriate breakeven quantity, calculate what it should be$?$ THE ANSWER IS $14032\mathrm{.}25.$ PLEASE SHOW WORK BY HAND.