excel break even point Schweser Satellites Inc. produces satellite earth stations that sell for $95,000 each. The firm's fixed costs, F, are $2 million, 50 earth stations are produced and sold each year, profits total $400,000; and the firm's assets (all equity financed) are $4 million. The firm estimates that it can change its production process, adding $3 million to investment and $360,000 to fixed operating costs. This change will (1) reduce variable costs per unit by $12,000 and (2) increase output by 23 units, but (3) the sales price on all units will have to be lowered to $84,000 to permit sales of the additional output. The firm has tax loss carry forwards that render its tax rate zero,
excel break even point Schweser Satellites Inc. produces satellite earth stations that sell for $95,000 each. The firm's fixed costs, F, are $2 million, 50 earth stations are produced and sold each year, profits total $400,000; and the firm's assets (all equity financed) are $4 million. The firm estimates that it can change its production process, adding $3 million to investment and $360,000 to fixed operating costs. This change will (1) reduce variable costs per unit by $12,000 and (2) increase output by 23 units, but (3) the sales price on all units will have to be lowered to $84,000 to permit sales of the additional output. The firm has tax loss carry forwards that render its tax rate zero,
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