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:

Naltrexone

A medication used primarily in the management of alcohol dependence and opioid dependence, by blocking the euphoric effects of these substances.

Endorphins

Natural, pain-relieving chemicals produced by the brain in response to stress or pain, often associated with feelings of euphoria and well-being.

Substance-Related Disorders

Disorders that involve the excessive use and dependence on psychoactive substances, leading to significant impairment or distress.

Significantly More

A phrase often used to indicate a substantially greater amount, degree, or extent in comparison to something else.