Compute the selling price of each copy

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Lee Inc. just purchased a digital color printer for $240,000 to launch its publishing project. This printer will be fully depreciated by the straight-line method over its 3year economic life, and can be sold for $48,000 at the termination of the project. The variable costs are $15 per copy, and annual fixed costs are $120,000. An annual sales volume of 50,000 copies of the book is expected over the life of this 3-year project. The marginal tax rate is 30% and the appropriate discount rate is 14%. Compute the selling price of each copy of the book that results in a zero NPV for this publishing project.

Reference no: EM131757985

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