An investor was presented with a production line project in which the investment volume is 285,000 dollars, the annual sales volume is 1,800 units, the unit price is 135 dollars, the annual costs are 72,000 dollars, and the annual fixed costs are 142,500 dollars. Calculate the simple rate of return and the break-even point for the project?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 5PB: Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated...
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An investor was presented with a
production line project in which
the investment volume is 285,000
dollars, the annual sales volume
is 1,800 units, the unit price is
135 dollars, the annual costs are
72,000 dollars, and the annual
fixed costs are 142,500 dollars.
Calculate the simple rate of return
and the break-even point for the
project?
Transcribed Image Text:An investor was presented with a production line project in which the investment volume is 285,000 dollars, the annual sales volume is 1,800 units, the unit price is 135 dollars, the annual costs are 72,000 dollars, and the annual fixed costs are 142,500 dollars. Calculate the simple rate of return and the break-even point for the project?
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