Fex Ed is considering a new product launch. The project will…
Fex Ed is considering a new product launch. The project will cost $2,000,000, have a 5-year life, and have no salvage value; depreciation is straight-line to zero. Sales are projected at 500 units per year, price per unit will be $7,500, variable cost per unit will be $6,000, and fixed costs will be $225,000 per year. The relevant tax rate is 21 percent. Based on your experience, you think the unit sales, variable cost, and fixed cost projections given here are probably accurate to within ± 5%. For the worst case, what is cash breakeven sales quantity level (ignoring taxes)? You may round to the nearest tenth of a unit.