Winner Where She Goes Inc. is considering an investment of $800,000 in a new equipment line for bonding and packaging beef products. The equipment has an expected five year. Sales are expected to be 900,000 units per year at $3 per unit. Fixed costs excluding depreciation are $300,000 per year and variable costs at $1.80 per unit. The equipment will be depreciated over 5 years using the straight line method with a salvage value of zero. The corporation pays income tax at a rate of 34%.
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Total Costs
Total revenue
Operation Profit (EBIT)
Net income after tax and interest
Break-Even Units and dollars (Hine: BE (Units) = Fixed cost/price per unit - variable cost per unit.