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 ﬁnancial 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 financial break-even quantity is calculated by setting the net present value (NPV) of the project to zero and solving for the quantity. The formula involves fixed costs, variable costs, price per unit, required return, initial investment, and salvage value. After calculations, the break-even quantity is found to be 4,532 units.

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