Multiple Choice
The Solar Calculator Company proposes to invest $5 million in a new calculator-making plant that will depreciate on a straight-line basis. Fixed costs are $2 million per year. A calculator costs $5 per unit to manufacture and sells for $20 per unit. If the plant lasts for three years and the cost of capital is 12 percent, what is the accounting break-even level of annual sales? (Assume no taxes.)
A) 133,334 units
B) 272,117 units
C) 244,444 units
D) 466,666 units
Correct Answer:
Verified
Correct Answer:
Verified
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