Question: please show work 8. Spencer Tools would like to offer a special product to its best customers. It requires $55,000 of investment for new equipment.
8. Spencer Tools would like to offer a special product to its best customers. It requires $55,000 of investment for new equipment. The fixed costs are estimated at $21,000. The product sells for $22.50 per unit and variable cost is $10 per unit. Assuming a required rate of return of 10%. a) Using a 5-year depreciation schedule, what's the depreciation? b) What is the accounting breakeven units? c) What's the cash break-even units? d) What's the financial breakeven units? e) What's the OCF (payment) when NPV =0
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