Q3/A manufacturing company leases a building for $120000 per year for its manufacturing facilities. In addition, the machinery in this building is being paid for in installments of $30000 per year. Each unit of the product produced costs $15 in labor and $10 in materials. The product can be sold for $50. 1. How many units per year must be sold for the company to breakeven? 2. If 10000 units per year are sold, what is the annual profit? 3. If the selling price is lowered to $40 per unit, how many units must be sold each year for the company to earn a profit of $150000 per year?
Q3/A manufacturing company leases a building for $120000 per year for its manufacturing facilities. In addition, the machinery in this building is being paid for in installments of $30000 per year. Each unit of the product produced costs $15 in labor and $10 in materials. The product can be sold for $50. 1. How many units per year must be sold for the company to breakeven? 2. If 10000 units per year are sold, what is the annual profit? 3. If the selling price is lowered to $40 per unit, how many units must be sold each year for the company to earn a profit of $150000 per year?
Chapter10: Project Cash Flows And Risk
Section: Chapter Questions
Problem 13PROB
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Transcribed Image Text:Q3/A manufacturing company leases a building for S120000 per year for its
manufacturing facilities. In addition, the machinery in this building is being paid
for in installments of $30000 per year. Each unit of the preduct produced costs $15
in labor and S10 in materials. The product can be sold for $50.
1. How many units per year must be sold for the company to breakeven?
2. If 10000 units per year are sold, what is the annual profit?
3. If the selling price is lowered to $40 per unit, how many units must be sold
each year for the company to earn a profit of $150000 per year?
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