Sale price necessary to break even within two years

Reference no: EM13246820

Assume that the following data has been determined for thedevelopment and sale of a new digital thermometer for home use.

Development cost = $250,000

Production investment = $500,000

Sales volume = 20,000 units per year

Sales lifetime = 7 years

Production costs per unit = $5

Determine:

(a) The sale price necessary to break even within twoyears.

(b) The profit expected over the estimated saleslifetime.

Reference no: EM13246820

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