Suppose you are examining an investment in a new machine $($Machine A$),$ which costs $$6,300,000.$ It lasts $6$ years and costs $$1,800,000/$year to operate.

Quantity sold will be $240,000$ units$/$year at a price of $$95$ each. Average variable costs are $26\%$ of selling price. The machine will be fully depreciated on a straight$-$line basis over the course of its life and there is no salvage value. The tax rate is $20\%$ and you need to make a $12\mathrm{.}5\%$ return on your investment.

a$.$ What is the NPV of this investment? Show$/$explain$/$calculate$.$

b$.$ If you could use bonus depreciation instead of the straight$-$line depreciation method, what would that do to the NPV of the project $($I$$m not asking for a number...I$$m asking for an intuitive explanation$)?$ Why?

c$.$ What would be the accounting break$-$even number of units for this investment?

d$.$ What would be the financial break$-$even number of units for this investment?