Question: D Question 7 1 pts Pinder Ltd is considering building a toy factory for $358,584. It is a five-year project, after which the disposal costs
D Question 7 1 pts Pinder Ltd is considering building a toy factory for $358,584. It is a five-year project, after which the disposal costs will cancel out the salvage value from the factory. During each of the five years, Pinder Ltd estimates sales volume to be 26,146 units, selling price to be $26, variable cost to be $6, and fixed costs to be $124,838. Pinder Ltd's required rate of return is 10%. Pinder Ltd is concerned about a potential drop in sales volume impacting investment returns. Assume cash flows occur at the end of each year, except for initial cash flows. Based only on the information above, what does the sales volume need to drop to before NPV of the project becomes zero? Ignore any tax effects and depreciation of the asset. (Round to the nearest two digits) 10,770.81 10,871.42 O 10,571.35 None of the other answers are correct. O 10,671.26
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
