Calculate the NPV Break-Even Level of Sales for a Project

question 123

Multiple Choice

Calculate the NPV break-even level of sales for a project requiring an investment of $3,000,000 and providing as cash flows:.15 × sales less $250,000.Assume the project will generate these cash flows for 10 years and that the discount rate is 10 percent.

• A)$3,254,890
• B)$3,504,890
• C)$4,921,549
• D)$19,686,667

---

Definitions:

Marginal Benefits

The incremental enjoyment or usefulness received from consuming or manufacturing another unit of a commodity or service.

Public Good

Products or services accessible to all people within society at no expense, made possible by the government or by private groups or individuals, not for the purpose of financial gain.

Bike Paths

Designated routes or tracks exclusively for bicycles, providing a safe space for cyclists away from motor vehicle traffic.

Public Good

Goods or services that are distributed to all individuals within a society without charge, presented by either public authorities or private entities, not for profit motives.