Calculator Company Proposes to Invest $5 Million in a New

question 55

Multiple Choice

Calculator Company proposes to invest $5 million in a new calculator making plant. Fixed costs are $2 million a year. A calculator costs $5/unit to manufacture and can be sold for
$20/unit. If the plant lasts for 3 years and the cost of capital is12%, what is the approximate break-even level of annual sales? (Assume no taxes.) (approximately)

• A) $133,333 units
• B) $272,117 units
• C) $227,533 units
• D) None of the above

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Definitions:

Safety Initiative

A safety initiative is an organized effort or program designed to improve safety and reduce the risk of harm in a particular environment, such as in workplaces, schools, or public spaces.

Limited Abbreviation

The use of shortened forms of words or phrases, typically to save space or time, but restricted in scope to avoid confusion.

Excess Complexity

The state or condition where a system or process has become overly complicated, potentially leading to inefficiency or confusion.

Recognizing Process

The cognitive process involved in identifying and understanding stimuli, concepts, or objects.