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oneicyahdaley10
oneicyahdaley10
16.12.2020 • 
Business

initial cash outlay is $150,000, no residual value. sales price is expected to be $2,250 per unit, with $595 per unit in labor expense and $795 per unit in materials. direct fixed costs are estimated to run $20,750 per month. cost of capital is 8%, and the required rate of return is 10%. they will incur all operational costs in year 1, though sales are expected to be 55% of break-even. break-even (considering only direct fixed costs) is expected to occur in year 2. variable costs will increase 2% each year, starting in year 3. sales are estimated to grow by 10%, 15%, and 20% for years 3 - 5. they have asked you to calculate: the product’s contribution margin break-even quantity

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