Question

We are evaluating a project that costs $650,000, has a five-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 47,000 units per year. Price per unit is $56, variable cost per unit is $31, and fixed costs are $845,000 per year. The tax rate is 21 percent, and we require a return of 10 percent on this project.

Answer 1

The subject of this question is Business. It involves evaluating a project's cost, lifespan, sales projections, and financial parameters. The question also requires calculations and the determination of the profit-maximizing quantity of output.

The subject of this question is Business. The question involves evaluating a project based on its cost, lifespan, sales projections, and financial parameters. It requires calculations of average variable cost, total revenue, marginal revenue, total cost, and marginal cost. Additionally, the question seeks the profit-maximizing quantity of output and the construction of relevant curves.