You work for a camera company and are tasked with creating a breakeven analysis for a new piece of equipment. You are provided with the following information:

Units sales: 100,000 year 1; 150,000 year 2; 200,000 year 3.

Unit cost: $60 year 1; 55 year 2; 50 year 3.

Advertising year 1 $1,500,000 for all three years

Personal Selling costs: $400,000 year 1; $480,000 year 2; $560,00 year 3.

Dealer promotion costs: $1,200,000 for all years.

The production system upgrade will cost $700,000 in year one.

The targeted return on sales is 10%

The current sale price is $97.90.

In what year will the sell price exceed the breakeven point?

In what year will the company recover all the costs associated with this investment?

Year 1, Year 3

Year 2, Year 3

Year 2, Year 2

Year 3, Year 1