Question

Company FIN3610-FTRA has a six-year project that requires an initial investment of $30,000. Every year, the project will pay fixed costs of $20,000 to produce the product. Also, we know that the variable costs per unit will be $36, and the price per unit will be $58. The required return is 10%. Please calculate the financial break-even quantity for this project. (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)

Answer 1

909.09

Step-by-step explanation:

Breakeven quantity are the number of units produced and sold at which net income is zero

Breakeven quantity = fixed cost / price – variable cost per unit

$20,000 / 58 - 36 = 909.09