Break-even analysis

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(Break-even analysis) The Marvel Mfg. Company is considering whether or not to construct a new robotic production facility. The cost of this new facility is ?$588,000 and it is expected to have a? six-year life with annual depreciation expense of ?$98,000 and no salvage value. Annual sales from the new facility are expected to be $1,960 units with a price of ?$1,070 per unit. Variable production costs are ?$620 per? unit, and fixed cash expenses are $85,000 per year.

a. Find the accounting and the cash? break-even units of production.

b. Will the plant make a profit based on its current expected level of? operations?

c. Will the plant contribute cash flow to the firm at the expected level of? operations?

Reference no: EM133061023

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