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Bonus Question: Use the provided excel file to solve this question). A small company receives an...

Bonus Question: Use the provided excel file to solve this question). A small company receives an annual order of 800 units which are sold at $85 per unit. The production cost is $30 per unit and the fixed cost per year is $3,500. The initial investment is $ 75,000 and can be depreciated on a MACRS basis over a seven-year period where the marginal income tax rate is 35%. At the end of 4 years, the company is expected to retain a market value of 30% of the initial investment. Determine the required annual sales units to break even, given that MARR is 15%. (Choose the closest answer):

a) 565 units

b) 622 units

c) 590 units

d) 543 units

None of the above choices is correct

Solutions

Expert Solution

Rahul Sunny answered 2 years ago
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