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:

Kilograms

A metric unit of mass equal to 1000 grams.

Ounces

A unit of weight in the avoirdupois system, equal to 1/16 of a pound or approximately 28.35 grams.

Liters

A metric unit of volume equal to 1,000 cubic centimeters or about 0.26 gallons.

Milligrams

A reiterated definition: A metric unit of weight that equals to 0.001 grams, frequently used in pharmaceutical measurements.