Problem 10-14 Break-Even (LO2)

Modern Artifacts can produce keepsakes that will be sold for $73 each. Non-depreciated fixed costs are $1,070 per year and variable costs are $45 per unit.

a.	If the project requires an initial investment of $2,850 and is expected to last for 6 years and the firm pays no taxes, what are the accounting and NPV break-even levels of sales? The initial investment will be depreciated straight-line over 6 years to a final value of zero, and the discount rate is 14%. (Round your answers to the nearest whole dollar.)
	Accounting break-even sales level $
	NPV break-even sales level $

b.	How do your answers change if the firm's tax rate is 40%? (Round your answers to the nearest whole dollar.)
	Accounting break-even sales level $
	NPV break-even sales level $