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Question 2 (25 points) A chip manufacturer makes video gaming chip that can be sold for $50. The chip material cost is $15 for each
Question 2 (25 points) A chip manufacturer makes video gaming chip that can be sold for $50. The chip material cost is $15 for each chip. The operations costs of the chip manufacturer (administration etc.) is $100000. The chip manufacturing machinery costs $500000 that is depreciated over 10 years to a salvage value of zero. a. What is the accounting breakeven level of sales in terms of number of chips sold? b. What is the NPV breakeven level of sales assuming a tax rate of 35\%, 10-year project life and a discount rate of 12%
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