The Financial Calculator Company Proposes to Invest $12 Million in a New

question 16

Multiple Choice

The Financial Calculator Company proposes to invest $12 million in a new calculator-making plant that will depreciate on a straight-line basis. Fixed costs are $3 million per year. A financial calculator costs $10 per unit to manufacture and sells for $30 per unit. If the plant lasts for four years and the cost of capital is 20 percent, what is the accounting break-even level of annual sales? (Assume no taxes.)

• A)300,000 units
• B)150,000 units
• C)381,777 units
• D)750,000 units

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Definitions:

High-level Source Program

A program written in a high-level programming language which is easier for humans to understand and must be translated into machine code by a compiler or interpreter.

Interpreter

An Interpreter is a program that directly executes instructions written in a programming or scripting language without requiring them to have been compiled into machine-language code.

Translates

In computing, translates generally refers to the process of converting code from one form or language to another, such as from high-level code to machine code.

Executes

In computing, to run or carry out a command, program, or instruction by the system's processor.