1. A firm has estimated that the fixed costs of operations for a new product at $4.5M per year. Variable costs will depend on the volume of production, and has been quantified at $250 per unit. If the firm plans to sell the product for $1000. What volume of sales is needed for this product to break-even? 2. A Machine costs $30,000 to purchase . Salvage value of the machine after 5 years = $7000. Calculate the machines capital recovery cost (EUAC) at 10%? 3. How much money must be invested in a retirement plan each month to accumulate $500,000 in 20 years? Assume an annual interest rate of 6% compounded monthly.

1. A firm has estimated that the fixed costs of operations for a new product at $4.5M per year. Variable costs will depend on the volume of production, and has been quantified at $250 per unit. If the firm plans to sell the product for $1000. What volume of sales is needed for this product to break-even? 2. A Machine costs $30,000 to purchase . Salvage value of the machine after 5 years = $7000. Calculate the machines capital recovery cost (EUAC) at 10%? 3. How much money must be invested in a retirement plan each month to accumulate $500,000 in 20 years? Assume an annual interest rate of 6% compounded monthly.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Proudction Costs

Section: Chapter Questions

Problem 8SQP

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