What sales quantity per year will the investment break even

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Reference no: EM132581327

Question 1: An investment has an initial cash outflow of $210,000 for fixed assets that will be depreciated straight-line to zero over 4 years, which is the life of the project. The sales price is set at $19.95 a unit, the annual fixed costs are $237,000, and the variable cost per unit is $8.87. The tax rate is 22 percent and the discount rate is 11 percent. At what sales quantity per year will the investment break even on a financial basis?

Group of answer choices

Option 1: 29,787 units

Option 2: 29,143 units

Option 3: 27,886 units

Option 4: 28,096 units

Option 5: 30,308 units

Reference no: EM132581327

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