- Break-Even Analysis A production system for a new product has an initial investment cost of $240000 with an annual maintenance cost of $6000. The system is assumed to have permanent life. The...

- Break-Even Analysis

A production system for a new product has an initial investment cost of $240000 with an annual maintenance cost of $6000. The system is assumed to have permanent life. The production cost (operator, material, and process) of one item is $18 and the selling price is $32.

(a) Draw cash flow and break-even charts of this project and determine how many items must be sold per year just to break-even at an interest rate of 12% per year.

(b) Find the annual profit if 4000 units are sold