On investment appraisal and DCF analysis PaZ plc is considering an investment of 3,000,000 in a new facility to manufacture high quality spare parts. The facility has an expected life of 60 months. Sales are expected to be 600,000 units per year at a price of 10.00 per part. Fixed costs excluding depreciation of the facility are 800,000 per year, and variable costs are 6.50 per part. The plant will be depreciated over 60 months using the straight line method with a zero salvage value. The hurdle rate for the project is 10% with a project beta of 1.5. The corporation pays income tax at the rate of 24%. a) Derive the equation for Break-even NPV sales level as a function of project cash flows, discount rate and other relevant factors. Specify your variables. b) Determine the Break-even NPV sales level for the above project. c) If the average degree of risk aversion in the market is 1.5 with a market volatility of 20% and P&Z plc equity Beta risk changes to 2, find the NPV, payback period and profitability index of the project and comment on your results. d) The NPV criterion to investment appraisas widely used in practice. First, describe the pitfalls of NPV. Second, discuss how active managerial decision making during project implementation will affect the outcomes of NPV analysis