1. A firm is evaluating a proposal which has an initial investment of $60,000 and has cash flows of $16,000 per year for five years. Calculate the payback period of the project. If the firm’s maximum acceptable payback period is 3 years, should the firm accept the project?
2. A company's fixed operating costs are $370,000, its variable costs are $3.10 per unit, and the product's sales price is $6.00. What is the company's break-even point; that is, at what unit sales volume will its income equal its costs? Round your answer to the nearest whole number.