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The cost of machinery for a project is $400,000. Expected life of the equipment is 4 years with 10% salvage. Direct labor rate is $30/hr. Production rate is 15parts/hr. Direct Material Cost is $12.37/unit. Parts sell for $22/each. Straight line depreciation with a tax rate of 36%. The company wants to earn an annual nominal rate of 12%(1% per month), compounding monthly. Use an AEC equation to find how many parts need to be made each month to break even. Please show a step by step solution

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Financial Management, Finance

Category:- Financial Management
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