A manager has determined that a potential new product can be sold at a price of $50 each. The cost to produce the product is $35, but the equipment necessary for production must be leased for $100,000 per year. What is the break-even point? (Round your answer to the nearest whole number.)
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A manager has determined that a potential new product can be sold at a price of $50 each. The cost to produce the product is $35, but the equipment necessary for production must be leased for $100,000 per year. What is the break-even point? (Round your answer to the nearest whole number.)
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- Caduceus Company is considering the purchase of a new piece of factory equipment that will cost $565,000 and will generate $135,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return In Excel, see Appendix C.Gardner Denver Company is considering the purchase of a new piece of factory equipment that will cost $420,000 and will generate $95,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further Instructions on internal rate of return in Excel, see Appendix C.In order to produce a new product, a firm must lease equipment at a cost of $185,000 per year. The managers feel that they can sell 67,000 units per year at a price of $92. What is the highest variable cost that will allow the firm to at least break even on this project? (Round your answer to 2 decimal places.)
- 1.A manager has determined that a potential new product can be sold at a price of 10.00 each. The cost to produce the product is 5.00, but the equipment necessary for production must be leased for 25,000 per year. What is the break-even point? 2.In order to produce a new product, a firm must lease equipment at a cost of 100,000 per year. The managers feel that they can sell 50,000 units per year at a price of 75. What is the highest variable cost that will allow the firm to at least break even on this project? Variable Cost1. A manager has determined that a potential new product can be sold at a price of $25 each. The cost to produce the product is $17.5, but the equipment necessary for production must be leased for $75,000 per year. What is the break-even point? 2. In order to produce a new product, a firm must lease equipment at a cost of $175,000 per year. The managers feel that they can sell 65,000 units per year at a price of $90. What is the highest variable cost that will allow the firm to at least break even on this project? (Round your answer to 2 decimal places.)An engineer of a manufacturing company has determined the costs of producing a new product to be as follows: Equipment cost: $300,000/year Variable cost per unit of production: $15.00 Overhead cost: $50,000/year The company is planning to run this project for 5 years and estimated that the product can be sold for a unit price of $40. How many units must be produced and sold each year to break even? [Hints: no interest is given, so no consideration of time value of money. Use the knowledge you learnt in chapter 2]
- The ABC Corporation is considering introducing a new product, which will require buying new equipment for a monthly payment of $5,000. Each unit produced can be sold for $20.00. ABC incurs a variable cost of $10.00 per unit. Suppose that ABC would like to realize a monthly profit of $50,000. How many units must they sell each month to realize this profit?The ABC Corporation is considering introducing a new product, which will require buying new equipment for a monthly payment of $5,000. Each unit produced can be sold for $20.00. ABC incurs a variable cost of $10.00 per unit. How many units must ABC sell each month to break even?Acme Inc. has invested $50,000 in a new assembly line. Products produced by the new assembly line are sold for $100 per unit. Fixed annual costs are $10,000 while variable annual costs are $10 per unit. The assembly line will remain in operation for 10 years, after which it will be sold for $15,000. The company has a MARR of 15%. What is the minimum annual production volume required to generate a profit?
- An investor has agreed to produce 100 waffles/day for a restaurant, which is willing to pay 5₺ for each waffle. A waffle machine is urgently required to begin production. Meanwhile, the investor quickly finds two waffle machines from a supplier. Each machine has an expected 1-year lifetime. Please demonstrate the break-even points for both options, separately. After producing for one-year, which option will lead to more profits? Waffle Machine Total investment required before production Unit Cost to produce Notes by the investor Brand: Wiaomi Energy Efficiency: Moderate 10.000 2 this one costs less at the beginning Brand: Riemens Energy Efficiency: High 20.000 1 while using, this one should offer better energy efficiencyThe Falling Snow Company is considering production of a lighted world globe that the company would price at a markup of 0.30 above full cost. Management estimates that the variable cost of the globe will be $62 per unit and fixed costs per year will be $240,000. Assuming sales of 1,200 units, what is the full selling price of a globe with a 0.30 markup? Round to two decimal places.A recently retired professor, Melinda Marketing, plans to establish the Hot-Air FanCompany and manufacture circulating fans. She estimates the fixed cost of operations tobe $357,500 annually. The variable cost of producing the fans is forecasted to be $85 perunit.a. How many fans must be sold to break even if the fans are priced at $150?b. If Hot-Air sells 6,000 fans, what will be the EBIT?c. If Hot-Air sells 6,000 fans and has interest expense of $8,125, what is Hot-Air’stimes-interest-earned? Hot-Air does not have any nonoperating expenses.d. If the fans are priced at $150, what is Hot-Air’s breakeven sales?