Question: Consider this case: Petrox Oil Co. is considering a project that will have fixed costs of $15,000,000. Its sale price will be $32.50 per unit,

Consider this case: Petrox Oil Co. is considering a project that

Consider this case: Petrox Oil Co. is considering a project that will have fixed costs of $15,000,000. Its sale price will be $32.50 per unit, and it will have a variable cost per unit of $11.25. Therefore, Petrox Oil Co. has to sell units to break even on this project (Q_BE). Petrox Oil Co.'s marketing sales think that the market for the firm's goods is big enough to sell enough units to make the company's target operating profit of $15,000,000. In fact, she believes that the firm will be able to sell only about 200,000 units. However, she also thinks the demand for Petrox Oil Co.'s product is relatively inelastic, so the firm can increase the sale price. Assuming that the firm can sell 200,000 units, what price must it set to meet the CFO's EBIT goal of $15,000,000? $185.44 $169.31 $201.56 $161.25

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