1. (solving for i) Lance Murdock purchased a wooden statue of a Conquistador for $7,600 to put in his home office 7 years ago. Lance has recently married, and his home office is being converted into a sewing room. His new wife, who has far better taste than Lance, thinks the conquistador is hideous and must go immediately. Lance decided to sell it on e-bay and only received $5,200 for it, and so he took a loss on the investment. What was his rate of return, that is, the value of I?
What was Lance Murdock rate of return, that is, the value of i? Enter a negative percentage for a loss. _%
2. (Break-even analysis) The marvel Mcg. Company is considering whether or not to construct a new robotic production facility. The cost of this new facility is $600,000 and it is expected to have a six-year life with annual depreciation expense of $100,000 and no salvage value. Annual sales from the new facility are expected to be 2,000 units with a price of $1,000 per unit. Variable production costs are $600 per unit, and fixed cash expenses are $80,000 per year.
A. The accounting break-even units of production is __ units.