This is the whole question given Return to question Required information A proce

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This is the whole question given

Return to question Required information A process for producing the mosquito repellant Deet has an initial investment of $175,000 with annual costs of $45,000. Income is expected to be $90,000 per year. What is the annual breakeven production quantity for both payback periods if net profit, that is, income minus cost, is $10 per gallon? when i:0%, the annual breakeven production quantity is determined to be | 4500 gallons per year When ,-12%, the annual breakeven production quantity is determined to be | 5910.88 gallons per year.

Explanation / Answer

Here the Annual cost is $45000 And the annual income is $90000

then the Annual benefit less cost is = 90000 - 45000 = $45000

The Annual cost is $45000

Income less cost from a single gallon is $10

Therefore no. of galons that is required to sold to cover the annual cost is

45000/10 = 4500 gallons

the annual breakeven production quantity is 4500 gallons .

Assumption :- This quantity is to be taken excluding annual cost because here the life is not given.

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