Xyz is considering buying new production equipment the new

Reference no: EM13597569

XYZ produces a water filter that attaches to the faucet and cleans all water that passes through the faucet. Revenue and cost information for the water filter appears below:
Selling price .................... $80 per unit
Variable costs ................... $20 per unit
Fixed costs (in total) ........... $840,000

XYZ is considering buying new production equipment. The new equipment will increase fixed costs by $80,000 per year and will decrease the variable cost of the water filter by $4 per unit. Calculate the number of units of the water filter that XYZ must sell in order to be economically indifferent between buying the new production equipment and continuing to use their old equipment.

Reference no: EM13597569

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