Credit Analysis

[AC1978]

Have the following formula and need help understanding it:

NPV = 0 = –[($315)(3,000) + ($245 – 240)(3,000) + ($245)(3,100 – 3,000)] + [(P – 245)(3,100) – ($315 – 240)(3,000)]/.02
0 = –945,000 – 15,000 – 24,500 + 155,000P – 49,225,000
155,000P = 50,209,500;
P* = $323.93

 

[AC1978]

For some reason I must have hit a button and didn't realize i was posting.

I understand all parts of the formula except how to get the 155,000P.
This formula is for the break even point of the cost/unit. Here are some other figures that were given that may be helpful:

Required return 2.0%

Current Policy New Policy
Price per unit $315 $320
Cost per unit $240 $245
Unit sales per month 3,000 3,100

Thanks in advance for an assitance on understanding "P".

 

[rosemarry2]

Have the following formula and need help understanding it:

NPV = 0 = –[($315)(3,000) + ($245 – 240)(3,000) + ($245)(3,100 – 3,000)] + [(P – 245)(3,100) – ($315 – 240)(3,000)]/.02
0 = –945,000 – 15,000 – 24,500 + 155,000P – 49,225,000
155,000P = 50,209,500;
P* = $323.93

Hello,

Please check attachment for Project on Credit Analysis Techniques, so please download and check it.