What is the economic break-even level of sales

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Question: 1. What is the minimum cash flow that could be received at the end of year 3 to make the following project "acceptable"? Initial cost = $100,000; cash flows at end of years 1 and 2 = $45,000; opportunity cost of capital = 10%.

2. What is the economic break-even level of sales for a project costing $4,000,000 and generating annual cash flows equal to 0.30 × sales - $450,000? Assume the project will last 10 years and require a discount rate of 12%.

Reference no: EM131718869

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