URGENT, I NEED HELP IN FINDING OUT HOW EXACTLY DO YOU GET 14.58 % WHEN FINDING BREAKEVEN PROBABILITY OF DEFAULT....detailed step by step (divide what by what) would be appreciated!!

9.a.The cash outlay for the credit decision is the variable cost of the engine. If this is a one-time order, the cash inflow is the present value of the sales price of the engine times one minus the default probability. So, the NPV per unit is:

NPV = $1.5M + (1 .005)($1.8M)/1.025

NPV = $247,317.07 per unit

The company should fill the order.

b.To find the breakeven probability of default, , we simply use the NPV equation from part a, set it equal to zero, and solve for . Doing so, we get:

NPV = 0 = $1.5M + (1 )($1.8M)/1.025

= .1458 or 14.58%