A 6-Year Project Has an Economic Break-Even Level of Sales

question 45

Multiple Choice

A 6-year project has an economic break-even level of sales of $5 million and a discount rate of 8%. The annual cash inflows are equal to 10% of sales minus $300,000. What was the initial investment in the project assuming that none of the investment is recoverable when the project ends?

• A) $416,667
• B) $924,576
• C) $1,016,678
• D)$2,311,450

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Definitions:

Injection

The act of administering a liquid, especially a drug, into a body part, typically using a syringe and needle, for therapeutic reasons.

Absorption

The process by which one substance is absorbed, or taken in and incorporated, into another, as when the body converts food or drugs into a form it can use.

Metabolize

The process by which living organisms transform food into energy and building blocks for cells, or breaking down of substances to excrete waste.

Body Systems

Organized groups of tissues that work together to perform complex functions for the body, such as the circulatory, digestive, and nervous systems.