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

question 97

Multiple Choice

Calculate the economic break-even level of sales for a project requiring an investment of $3 million and providing annual cash flows equal to 15% of sales less $250,000. None of the initial investment is recoverable. Assume the project will generate these cash flows for 10 years and the discount rate is 10%.

• A) $3,254,890
• B) $3,504,890
• C) $4,921,575
• D)$1,686,667

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Definitions:

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Reflex of the intramural plexus of the digestive tract that does not involve the brain or spinal cord.

CNS

The central nervous system, consisting of the brain and spinal cord, coordinates body activities.

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A stimulant and addictive substance found in tobacco products that acts on the nervous system.

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Physiological reactions initiated by the sympathetic nervous system that prepare the body for 'fight or flight' situations, such as increased heart rate and blood flow.