Which is worth more using net present value

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Q1. A company sells a product which has a unit sales price of $12, unit variable cost of $10 and total fixed costs of $60,000. How many units must the company sell to breakeven?

Q2. Assume you are offered $10,000 now or $2,000 per year for 7 years. If your rate is 12%, which is worth more using net present value?

Q3. A company is planning to purchase one of the following assets: Machine X will cost $25,285 and earn $6,500 per year; Machine Y will cost $30,750 and earn $7,500 per year. Both machines have a 5 year useful life. Assume the company uses 8% to evaluate this class of asset. What is the internal return of Machine Y?

Reference no: EM133161077

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