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6. If a product costs $50 per unit, the fixed costs are $1000,000 and the revenue...

6. If a product costs $50 per unit, the fixed costs are $1000,000 and the revenue is $65 per unit, how many units the company should sell to achieve a profit return of 20% over the initial investment of $2.5 million? Show your calculations. (2 points)

Solutions

Expert Solution

Required Profit = 0.20(2,500,000) = $500,000

So,

Let number of units be n,

(65 - 50)n - 1,000,000 = 500,000

n = 100,000

Number of units sold = 100,000

jeff jeffy answered 2 years ago
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