Break-Even Intuition Consider a project with a required return of R per cent that costs £I and will last for N years.

The project uses straight-line depreciation to zero over the N-year life; there is no salvage value or net working capital requirements.

(a) At the accounting break-even level of output, what is the IRR of this project? The payback period? The NPV?

(b) At the cash break-even level of output, what is the IRR of this project? The payback period? The NPV?

(c) At the financial break-even level of output, what is the IRR of this project? The payback period? The NPV?