Modern Artifacts can produce keepsakes that will be sold for $88 each. Nondepreciation fixed costs are $950 per year and variable costs are $66 per unit.
a. If the project requires an initial investment of $3,000 and is expected to last for 6 years and the firm pays no taxes, what are the accounting and economic break-even levels of sales? The initial investment will be depreciated straight-line over 6 years to a final value of zero, and the discount rate is 8%.
Economic break-even level of sales = $ ____________ per year, or almost ____________ units.