You want to start a firm whose output you believe you can sell for $25 per unit. The operation will require fixed costs of $130,000, and the variable costs are expected to be $16 a unit. a.) What will be the break-even level of output? b.) If fixed costs reduce to $100,000 and the variable costs reduced to $15, what is the new break-even level of output?

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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You want to start a firm whose output you believe you can sell for $25 per unit. The operation will require fixed costs of $130,000, and the variable costs are expected to be $16 a unit.

a.) What will be the break-even level of output?

b.) If fixed costs reduce to $100,000 and the variable costs reduced to $15, what is the new break-even level of output?

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