Question
The Marx Brewing Company is considering a 5-year project that involves buying a new machine for $2,000 in Year 0. It will be depreciated straight-line
The Marx Brewing Company is considering a 5-year project that involves buying a new machine for $2,000 in Year 0. It will be depreciated straight-line to zero book value in 5 years, thus the depreciation rate in each year during Years 1 through 5 will be 20%. The fixed operating cost per year is $1,800 and the variable operating cost per unit is $1.00. The expected selling price per unit is $2.00. Marx's tax rate is 21%, and it uses a 16% discount rate.
What is the Present Value Break-Even Point? Round your final answer to the nearest whole number.
1,989 | ||
2,745 | ||
2,519 | ||
2,467 |
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