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You are considering investing in a company that cultivates abalone for sale to local restaurants. Use the following information:

Sales price per abalone = $ 85.00
Variable costs per abalone = $ 5.40
Fixed costs per year = $ 680,000.00
Depreciation per year = $ 51,000.00
Tax rate = 40.00 %

The discount rate for the company is 11 percent, the initial investment in equipment is $357,000, and the project's economic life is seven years. Assume the equipment is depreciated on a straight-line basis over the project's life.

What is the financial break-even level for the project? _____units

 

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