### Calculated using stright-line down to zero salvage value

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A company is considering a 5-year project that opens a new product line and requires an initial outlay of \$85,000. The assumed selling price is \$97 per unit, and the variable cost is \$63 per unit. Fixed costs not including depreciation are \$20,000 per year. Assume depreciation is calculated using stright-line down to zero salvage value. If the required rate of return is 11% per year, what is the financial break-even point?

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