Suppose Q-phone Ltd is considering whether to launch its new Shadow-bone phone. The selling price is $1,350 per phone. The variable cost is $650 per phone and the fixed cost is $540 000 per year. The total investment to undertake the project is $2 900 000. This amount will be depreciated in a straight-line to zero over five years. Assuming zero salvage value, no working capital consequences, 35 percent tax rate and 15 percent discount rate.

Required

Calculate the cash, accounting, and financial break-even point quantities for Q-phone by using the tax shield approach.