Charge per unit to breakeven on investment

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Mira Manufacturing invested in a new manufacturing line to increase competitiveness. The initial cost of the line was $265567. The costs to run the line are projected to be $176302, increasing by 12% each subsequent year. To remain competitive, the line will require a substantial overhaul of $48253 at the end of year 7. The line is estimated to have a lifespan of 12 years.

Mira projects it will sell 89802 units the first year, with the number of units sold increasing by 35935 units each subsequent year. What is the minimum price that Mira must charge per unit to breakeven on the investment? Use a MARR of 5% compounded annually to make the calculation.

Reference no: EM131572808

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