How many items must be produced and sold annually

Assignment Help Financial Management

Reference no: EM132057305

A plant is constructed at a cost of $1,000,000 to produce a particular item that will sell for $9, It is anticipated that the product will be obsolete after 10 years and at that time the plant will be destroyed with no salvage value. The fixed cost of operating the plant is $200000 annually and the variable cost for labor and material is S5 per item. How many items must be produced and sold annually in order to break even if interest is at 8%.

Reference no: EM132057305

Questions Cloud

How much will you invest in each : The risk-free rate is 4%. You can invest in Bay Corporation and City Limited. How much will you invest in each?

Find the equivalent annual cost of both machines : he annual operating cost of the new machine is $9000. Using an interest rate of 15%, find the equivalent annual cost of both machines.

Difference between currency board and dollarization : What is the difference between a currency board and dollarization?

What needs are being met by the product purchase : What needs are being met by the product purchase? (Dyson Cordless Vacuum Cleaner) What are the benefits to the consumers?

How many items must be produced and sold annually : How many items must be produced and sold annually in order to break even if interest is at 8%.

Which risk you are exposed to if you do not set up the hedge : Explain which risk you are exposed to if you do not set up the hedge. Separately consider the scenarios where interest rate rises and declines.

T-bill price that rules out arbitrage opportunities : Compute the 20-day T-bill price that rules out arbitrage opportunities.

What is an estimate of wacc for your computer sales division : One division sells software and the other division sells computers through a direct sales? What is an estimate of the WACC for your computer sales division?

Investors equity-linked certificate of deposit : In June 1999, Charles Schwab offered investors an Equity-linked Certificate of Deposit (CD).

User Account

All Pages