A project has the following estimated data: price = $150 per unit; variable costs = $88 per unit; ﬁxed costs = $250,000; required return = 11%; initial investment = $200,000; $50,000 salvage value; life =
Ten years. What is the cash break-even quantity?
A) 4,032 units.
B) 4,274 units.
C) 4,532 units.
D) 4,784 units.
E) 4,955 units.

Question

Quizplus · Accepted Answer

The cash break-even quantity is calculated by dividing the fixed costs by the contribution margin per unit (price - variable cost). Here, it is $250,000 / ($150 - $88) = 4,032 units.

A Project Has the Following Estimated Data: Price = $150