Explain how you determined the rate

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Reference no: EM1350222

The first year after the investment, your sales equal 95,000 boxes of kitchen gadgets and your revenue equals $9,500,000. Assuming that your sales volume remains unchanged over the remaining four-year period, prepare a report in Microsoft Word on the following:

• The sale price of each box of kitchen gadgets during the first year after the investment.

• The rate of annual inflation as applied to each box of kitchen gadgets over the remaining four-year period that will assure that you break even and will be able to pay off your loan on time. Explain how you determined the rate.
Now, assume that each box of kitchen gadgets is priced at $142. All of your other sales and cost variables are the same as above. However, the economy has entered a period of deflation. Prepare a report in Microsoft Word on the following:

• The rate of annual deflation as applied to each box of kitchen gadgets over the remaining four-year period below which your venture will become unprofitable. Explain how you determined the rate.

Reference no: EM1350222

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