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Compute what is equivalent annual cost

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Problem 1: A 3-year project has a contribution margin of $16, projected fixed costs of $120,000, a projected variable cost per unit of $12, straight-line depreciation for 3 years of $60,000 (per year), and a projected present value break-even point of 13,601.20 units. The tax rate is 34 percent and the discount rate is 13 percent. What is the equivalent annual cost?

A. $24,828.67
B. $37,619.20
C. $58,624.28
D. $84,828.67
E. $200,293.44

Reference no: EM132953595

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