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What is the accounting and NPV break-even level of sales for a project requiring an investment of $10 million? Out of the initial investment, only
What is the accounting and NPV break-even level of sales for a project requiring an investment of $10 million? Out of the initial investment, only 4 million can be depreciated. The rest are sunk costs. and having variable costs equal to 40% of sales. General Expenses are 300,000$ a year and marketing expenses are $400,000 a year? R& D expenses are an additional 200,000$ a year. Assume the project will have a life of 10 years and the discount rate is 10%. Tax rate = 20%.
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