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Calculate the financial break-even point

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Question - A firm is considering purchasing new equipment costing $1,200,000 which will be depreciated straight line over 10 years, the life of the equipment. There is no salvage value and you can ignore taxes. The equipment is expected to produce new units which will sell for $1,000 per unit. Variable costs will be $600 per unit. Fixed costs are $360,000. Assume the firm's required rate of return is 12%. Calculate the financial break-even point.

Reference no: EM132792032

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