Finance Capital Budgeting - Minimum price of product by ClassOf1


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									              Sub: Finance                                                                      Topic: Capital Budgeting

              Determining the minimum price to be charged for product which to be
              produced from new project.
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              ABC Inc. wants to invest in a new project to develop a brand new product. The project requires
              an initial investment in equipment of $475,000 (25% CCA class). The project will also incur
              annual fixed costs of $93,500 and variable cost of $0.18 per unit. ABC expects to produce
              200,000 units of the new product. The product and the equipment have a life expectancy 
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