Question: Bluths Electronics is considering introducing a new smart speaker that will sell for $55 per unit. The variable cost is $25. Fixed costs are $30,000.

Bluths Electronics is considering introducing a new smart speaker that will sell for $55 per unit. The variable cost is $25. Fixed costs are $30,000. To make the product, the Bluths need to buy a $50,000 piece of equipment that will be depreciated on a straight line basis over the expected five year life of the product. Their required return is 14%. Ignoring taxes

Calculate the units sold needed to reach accounting break even.
Calculate the units sold needed to reach cash flow break even.
Calculate the units sold needed to reach financial break even.

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1. Which position would you take?

4. Is your choice different from that which you would recommend to Laura?

3. How does this fit with your preferences, career anchors, and values?