Font Paragraph Styles Dictate Sensitivity Quantitative Assignment Information: A young college student John decides to make computers in a small workshop. A single computer consists of the following components, that cost the amounts given: Components Cost in $ per computer Picture tube for monitor: 20 Bare chassis Passive resistors 25 Active IC's Cabinet Speakers /accessories 15 Other Costs and Expenses: In addition to the above part and component costs: John has one engineer (whom he cannot do without) and pays $ 24,000 a year for his services. This engineer has been employed on a five-year contract, that cannot be breached. John also has rented the workshop with a 'lease' that cannot be broken, paying $6,000 a year as rent. Assume John's venture has no other annual costs. As initial investment, John has also spent $ 100,000 on manufacturing plant and equipment that should be usable for a period of five years. SP: (357+40)=397 Q5: Suppose, John prices a computer at $ 230. Then at what level of sales will John make neither a profit or a loss. i.e., at what level of sales will John break even? Q6: Suppose John finds demand to be 1400 computers per year, so he makes this number of computers annually. Now what is his break-even price? 130% Focus Page 2 of 3 834 words QX