Question
Your firm is considering expanding. The have come across a product in Media PA (Called the Media Project) - This new product requires the purchase
Your firm is considering expanding. The have come across a product in Media PA (Called the Media Project)
- This new product requires the purchase of a new machine at an initial investment of $15 million and will be depreciated, in straight line form, to an expected salvage of zero over 10 years. However, at the end of Year 10, you believe you can sell the machine for $200,000
- If you decide to enter this new field, the price of the new product is expected to be $250, and the variable cost per unit is $100.
- The fixed cost of this project including depreciation is $2,000,000 per year.
1. What is the accounting break-even point in each year?
2. How much sales is the Accting Breakeven point in each year?
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