Paragraph Styles Question #3 Breakeven & EOQ Part A: The production manager obtained the following estimated costs/revenues for producing a new orbital impact wrench. Their plan is to produce that particular model wrench for only 5 years. Annual Sales = 10,000 units/year Sales Price = $450/unit Variable Cost -$295/unit (no learning is involved) Initial Investment - $1,500,000 Annual maintenance - $250,000 (to refresh tools after each 12-months of use) MARR 16% MACRS-5 Ordinary Tax Rate: 29% (2) A.1. Does the company break even during year 1, Yes or No? (2) A.2. How many units does it take the company to make/sell to break-even the first time? (3) A3. How much total profit does the company make over the 5 year period? (PEC) EC. Calculate the NPV for the project over the 5-year period (must include depreciation of original investment & taxes) Part B: (2) Calculate the Economic Order Quantity (EQ) for the following scenario: Procurement Processing Cost: $5,000 Daily Demand: 100 Total Inventory Holding Cost: $1,460.00/year