Question: XYZ 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 [25percent CCA class). The project will also incur annual fixed costs of $93,500 and variable cost of $0.18 per unit. XYZ expects to produce 200,000 units of the new product. The product and the equipment have a life expectancy of five years and the equipment can be sold for 7.5percent of its original cost at the end of the 5 years. Calculate the minimum price at which this product should be sold to earn a minimum rate of return of 5.0 percent per year? XYZ's corporate tax rate is 38.0%.