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You work for a camera company and are tasked with creating a breakeven analysis for a new piece of equipment. You are provided with
You work for a camera company and are tasked with creating a breakeven analysis for a new piece of equipment. You are provided with the following information: Units sales: 100,000 year 1; 150,000 year 2; 200,000 year 3. Unit cost: $60 year 1; 55 year 2; 50 year 3. Advertising year 1 $1,500,000 for all three years Personal Selling costs: $400,000 year 1; $480,000 year 2; $560,00 year 3. Dealer promotion costs: $1,200,000 for all years. The production system upgrade will cost $700,000 in year one. The targeted return on sales is 10% The current sale price is $97.90. In what year will the sell price exceed the breakeven point? In what year will the company recover all the costs associated with this investment?
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