Problem:
KMW Inc. sells finance textbooks for $150 each. The variable cost per book is $30 and the fixed cost per year is $30,000. The process of creating a textbook costs $150,000 and the average book has a life span of three years.
Required:
Question: What is the economic or NPV break-even number of books that must be sold each year given a discount rate of 12%?
Note: Provide support for your rationale.