SN 35: Capital Structure and Leverage Consider the case of Free Spint Industries Inc.: Free Spirit Industries Inc. is considering a project that will have fixed costs of $10,000,000. The product will be sold for $41.50 per unit, and will incur a variable cost of $11.25 per unit. Glven Free Spirit's cost structure, it will have to sell units to break even on this project (Que). Free Spirit's marketing and sales director doesn't think that the firm's market is big enough for the firm to break even. In fact, she believes that the firm will be able to sell only about 175,000 units. However, she also thinks that the demand for Free Spirit's product is relatively inelastic (so the firm can increase the sales price without significantly decreasing the volume of product sold). Assuming that the firm can sell 175,000 units, what price must it set to break even? $82.07 per unit $68.39 per unit . 564.97 per unit 575.23 per unit