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13. What is the quantity of sales at which the NPV of the project is zero? Investment= $500,000; variable cost= $120; fi...

13. What is the quantity of sales at which the NPV of the project is zero? Investment= $500,000; variable cost= $120; fixed cost= $65,000; product price= $150; life = 6 years; Ignore taxes and NWC. Required return rate= 14%.

  1. 5,415 units
  2. 5,772 units
  3. 5,993 units
  4. 6,453 units
  5. 6,663 units
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Answer #1

Cash flow per year should be = $ 128,578.75 [ 500000/(PVIFA(14%,6 years) ] Quantity to be = 6,453 units (128578.75+65000)/(15

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