Calculate the npv break-even level of sales

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Gemstones Inc. is considering a new production line. The expected economic life of the project is 8 years. The project will generate sales and incur costs annually. Variable cost is 52% of sales. Total annual fixed costs, excluding depreciation, are $305,000. The initial outlay of the project is $1,310,000 and will be depreciated on a straight-line basis to zero at the end of the project. The company's tax rate is 25% and the discount rate is 8.00%. Calculate the NPV break-even level of sales. (Assume that the half-year rule does not apply.)

Reference no: EM133110859

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