If Untel Inc

Multiple Choice

If Untel Inc.decides to manufacture a new generation of computer chips with a brief 2-year product life cycle, it expects to sell 1 million units each year.Variable cost per unit will be $75, fixed costs $5 million and depreciation $3 million.The initial investment will be $22.91 million.Untel uses a discount rate of 10%; its marginal tax rate is 40%.To reach break-even NPV, UNTEL must sell the chips for at least [blank] each.

A) $87
B) $105
C) $100
D) $1,000