Breakeven analysis. Suppose you are evaluating a four-year project, where each year is projected to be identical. The NINV of the project is $897,000, and the company’s WACC is 7.6%.

(a) What level of net cash flow each year would be the breakeven amount, where the project would have NPV of $0?

(b) Assume you know the depreciation each year is $56,000, costs of goods sold are 46% of sales, and the firm has a 21% tax rate. Given this, what level of sales would generate the breakeven cash flow level?

(c) If you have calculated the NPV to be $145,000, what level of sales is your best estimate?