What Is the Approximate Economic Break-Even Sales for a Project

question 62

Multiple Choice

What is the approximate economic break-even sales for a project costing $4,000,000 and generating cash flows according to .30 *sales - $450,000? Assume the project will last 10 years and require a discount rate of 12%.

• A) $2,093,654
• B) $2,359,047
• C) $3,859,798
• D) $13,783,333

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Definitions:

Physical Component

Aspects of something that are tangible or involve physical attributes or manifestations.

Attitudinal

Pertaining to attitudes, which are psychological tendencies expressed by evaluating a particular entity with some degree of favor or disfavor.

Schachter and Singer

Two psychologists known for their 1962 experiment and theory suggesting that emotions are determined by physiological arousal and cognitive labels.

General Feeling

A broad emotional state or mood that is not focused on any specific object or situation.