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How many paddle boards will you have to sell each year

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Question - You are involved with a canoe manufacturing business that is thinking of building a line of paddle boards. The cost of new equipment for this project is $600,000. You will be able to sell this equipment in 12 years for $120,000, and given its CCA rate the present value of the CAA tax shield this equipment creates is worth $30,000.. You project you will be able to sell each paddle board for $780, that your variable cost will be 55% of sales and that your annual fixed costs will be $45,000. If your marginal tax rate is 30% and the appropriate discount rate for the project is 9.0%. How many paddle boards will you have to sell each year to achieve financial break even?

Reference no: EM133085526

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