The Mini-Max Company has the following cost information on its new prospective project. Calculate the present value break-even point.
Initial investment: $700
Fixed costs are $200 per year
Variable costs: $3 per unit
Depreciation: $140 per year
Price: $8 per unit
Discount rate: 12%
Project life: 3 years
Tax rate: 34%
A) 68 units per year
B) 75 units per year
C) 84 units per year
D) 114 units per year
E) None of these.
Correct Answer:
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