Samuelson GmbH has just purchased a 600,000 machine to produce calculators. The machine will be fully depreciated
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Samuelson GmbH has just purchased a €600,000 machine to produce calculators. The machine will be fully depreciated using the 20 per cent reducing balance method over its economic life of 5 years and will produce 20,000 calculators each year. The salvage value of the machine will be equal to its residual or written down value.
The variable production cost per calculator is €15, and total fixed costs are €900,000 per year. The corporate tax rate for the company is 30 per cent. For the firm to break even in terms of accounting profit, how much should the firm charge per calculator?
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Related Book For
Corporate Finance
ISBN: 9780077173630
3rd Edition
Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe
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