The Mini-Max Company Has the Following Cost Information on Their

question 21

Multiple Choice

The Mini-Max Company has the following cost information on their new prospective project. Fixed costs are $200/year. (Initial investment is $700)
Variable costs: $3/unit.
Depreciation: $140/year.
Price: $8/unit.
Discount rate: 12%.
Project life: 3 years.
Tax rate: 34%.
Calculate the present value break-even point.

• A) 68.00 units/year.
• B) 113.27 units/year.
• C) 84.42 units/year.
• D) 75 units/year.

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Definitions:

Complete Monopolies

Situations where a single firm or entity has exclusive control over the supply of a particular good or service, with no close substitutes available.

Rival Companies

Firms operating in the same industry that compete against each other for market share.

Monopoly Power

Monopoly Power is the ability of a monopoly firm to set and control prices due to the lack of competitive market forces.

Wheat Farm

A type of agricultural establishment primarily engaged in the cultivation of wheat.