A manufacturing company is evaluating an investment plan to produce a new product based on the followingestimated data:• Equipment Cost: $150,000• Overhead Cost: $30,000/year• Sales price: $12/unitOperation cost: $20/operating hour• Production time: O.1 hour/unit• Planning horizon: 4 years• MARR: 15%Salvage value after 4 years: 0By using break-even analysis, the break-even sales value for the product should be:Select one:a. 6755 units Xb. 8255 unitsC. 9755 unitsd. 11,255 unitsThe correct answer is: 8255 units

A manufacturing company is evaluating an investment plan to produce a new product based on the following estimated data: • Equipment Cost: $150,000 • Overhead Cost: $30,000/year • Sales price: $12/unit • Operation cost: $20/operating hour • Production time: 0.1 hour/unit • Planning horizon: 4 years • MARR: 15% • Salvage value after 4 years: 0 By using break-even analysis, the break-even sales value for the product should be:

A manufacturing company is evaluating an investment plan to produce a new product based on the following estimated data: • Equipment Cost: $150,000 • Overhead Cost: $30,000/year • Sales price: $12/unit • Operation cost: $20/operating hour • Production time: 0.1 hour/unit • Planning horizon: 4 years • MARR: 15% • Salvage value after 4 years: 0 By using break-even analysis, the break-even sales value for the product should be:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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