The selling price (P) for a product is given by (P = 100 - 0.0015 q), where 'q' is sales volume. The product will require purchase of a machine that will cost $500,000 and will last for 5 years with no salvage value. The company wants to earn 20% on its money.
The variable cost of the product is:
(VC = 4q + 0.005 q^2)
a. Determine the fixed cost.
b. Write the profit equation.
c. What is the value of breakeven point?
d. Determine the sales volume that maximize profit.