Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $250. The materials cost for a synthetic diamond is $190. The fixed costs incurred each year for factory upkeep and administrative expenses are $2,450,000. The machinery costs $1.45 million and is depreciated straight-line over 10 years to a salvage value of zero. a. What is the accounting break-even level of sales in terms of number of diamonds sold?

Accounting Break Even: 43,250 Diamonds (I know this is part is right)

b. What is the NPV break-even level of sales assuming a tax rate of 35%, a 10-year project life, and a discount rate of 12%?

NPV break-even level of sales: _______ Diamonds