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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.
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