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The firm has invested in a five-year project. The initial cost for the project is 1,000,000. There is no change in net working capital. The
The firm has invested in a five-year project. The initial cost for the project is 1,000,000. There is no change in net working capital. The first years sales are $100,000 and the tax rate is 21 percent. If you expect the OCF for each year of the project to be the same as the first years OCF, the NPV of the project is -1,000,000. Based on this information, the project is operating at the:
A) the best case scenario
B) the base case scenario
C) financial break-even point.
D) cash break-even point.
E) accounting break-even point.
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