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The Taj Mahal Tour Company proposes to invest $3 million in a new tour package project. Fixed costs are $1 million per year. The tour package costs the company $500 to produce and can be sold at $1,500 per package to tourists. This tour package will last for the next five years. If the cost of capital is 20 percent, what is the NPV break-even number of tourists per year? (Ignore taxes. Round to the nearest 1,000.)

Sagot :

Answer:

2000

Explanation:

(X) * (1500 - 500) - 1,000,000 = 1,000,000 X (1000) = 2,000,000

X = 2,000,000/1000 = 2000

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