Handmade Abacus, Inc. manufactures and sells artisan-made abaci that are sold for $100 each. The materials cost for an average-size abacus is $40. Handmade incurs fixed costs each year in the amount of $200,000 for the upkeep of the factory. The machine used for making the abacus beads costs $1.0 million and is depreciated in full on a straight-line basis over 10 (ten) years.

A.) What is the accounting break-even level of sales in terms of abaci sold? (1 point)

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B.) Assuming a discount rate of 12%, a 10-year project life, and the tax rate of 35%, calculate the NPV break-even level of sales. (Hint: Let Q = # of abaci sold) (1 point)

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