As the manager of a company you wish to invest in a new machine, which costs € 4 million.The annual interest rate is 6%. The expected increase in revenue from the new machine in2025 and 2026 is € 1,700,000 and € 1,500,000, respectively. The expected increase in revenuein 2027 is highly uncertain.How much must the increase in revenue in 2027 be at least to break even, given the dataabove?○ Between € 1,200,000 and € 1,400,000Between € 800,000 and € 1,000,000O Between € 1,400,000 and € 1,600,000O Between € 1,600,000 and € 1,800,000O Between € 1,000,000 and € 1,200,000

Break-even revenue is the point at which total revenue equals total costs, resulting in neither…

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How much must the increase in revenue in 2027 be at least to break even, given the data above?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

As the manager of a company you wish to invest in a new machine, which costs € 4 million.
The annual interest rate is 6%. The expected increase in revenue from the new machine in
2025 and 2026 is € 1,700,000 and € 1,500,000, respectively. The expected increase in revenue
in 2027 is highly uncertain.
How much must the increase in revenue in 2027 be at least to break even, given the data
above?
○ Between € 1,200,000 and € 1,400,000
Between € 800,000 and € 1,000,000
O Between € 1,400,000 and € 1,600,000
O Between € 1,600,000 and € 1,800,000
O Between € 1,000,000 and € 1,200,000

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