The Solar Calculator Company Proposes to Invest $5 Million in a New

question 5

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

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Definitions:

Buyer Income

The financial resources available to a consumer, which influence the person's ability to make purchases within the market.

Market Economy

An economic system where decisions regarding investment, production, and distribution are based on supply and demand.

Productive Projects

Initiatives or plans undertaken to produce goods or services efficiently and effectively, contributing to the economy's growth.

Unproductive

Pertaining to activities or processes that do not generate any significant value, output, or growth, often resulting in inefficiency or waste.