Click to see additional instructions A company is considering an investment in a new product with...

Transcribed Image Text:

Click to see additional instructions A company is considering an investment in a new product with a 10-year horizon (product will be sold for 10 years). The upfront investment is $5 million and it is assumed to depreciate on a straight-line basis for 10 years, with no residual value. Fixed costs are assumed to be $700,000 per year. The company estimates variable cost per unit (v) to be $125 and expects to sell each unit for $400. There are no taxes and the required rate of return is 17% per year. Assume that the investment would occur today, and all future cash- flows will occur at the end of each year beginning in one year. What is the annual financial breakeven quantity? 6449 [Keep at least 3 decimals for intermediate answers. Round your final answer UP to the next highest WHOLE unit. (ie 421.2 would be rounded to 422)] Click to see additional instructions A company is considering an investment in a new product with a 10-year horizon (product will be sold for 10 years). The upfront investment is $5 million and it is assumed to depreciate on a straight-line basis for 10 years, with no residual value. Fixed costs are assumed to be $700,000 per year. The company estimates variable cost per unit (v) to be $125 and expects to sell each unit for $400. There are no taxes and the required rate of return is 17% per year. Assume that the investment would occur today, and all future cash- flows will occur at the end of each year beginning in one year. What is the annual financial breakeven quantity? 6449 [Keep at least 3 decimals for intermediate answers. Round your final answer UP to the next highest WHOLE unit. (ie 421.2 would be rounded to 422)]