You are considering a new product launch in UK . The project will cost 200 , 000 $ , have a four year life, and have no salvage value; depreciation is straight line to zero. Sales are projected at 1 2 0 units per year; price per year will be 6 , 0 0 0 $ , variable cost per unit will be 4 , 5 0 0 $ , and fixed costs will be 5 0 , 0 0 0 $ per year. The required return on the project is 2 0 % , and the relevant tax rate is 2 5 % . What is the accounting break - even level of output for base year? How do you interpret your results?
