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The Coffee Express purchased new coffee machines for a total of $1,500. They plan on selling coffee sales price is $1.00 per cup while the
The Coffee Express purchased new coffee machines for a total of $1,500. They plan on selling coffee sales price is $1.00 per cup while the variable cost per cup is $0.11. Useful life of the machine is 5 years. Assume no salvage value. Assume no depreciation and the firm is taxed at 25% and cost of capital is 15%
How many cups of coffee must it sell to break-even on a Financial Basis (NPV) after 5 years of sales?
Model your cash flows in Excel and calculate the NPV at 1,000 cups. Then, calculate the B/E units using the goal seek function.
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