A company has developed the following cash flow forecast for their new project. Rs. in million:

 

	Year 0	Years 1 - 10
Investment	(400)
Sales		440
Variable costs (75% of sales)		330
Fixed costs		20
Depreciation(Straight line method)		40
Pre-tax profit		50
Taxes( at 20 %)		10
Profit after taxes		40
Cash flow from operations		80
Net cash flow		80

What is the NPV of the new project? Assume that the cost of capital is 10 percent. The range of values that the underlying variables can take under three scenarios: pessimistic, expected and optimistic are as shown below:

 

Underlying Variable Investment               (Rs. in million)	Pessimistic   420	Expected   400	Optimistic  360
Sales (Rs. in million)	350	440	500
Variable cost as a percent of sales	80	75	70
Fixed costs (Rs. in million)	25	20	18
Cost of capital (%)	11	10	9

 1.What are the NPVs under the different scenarios ?

2.Calculate the accounting break-even point and the financial break-even point for the new project?