You can define the cash$-$flow break$-$even point as the sales volume $($in dollars$)$ at which cash flow equals zero. Assume a project has an initial cost and a $5-$year life.

a$.$ Is the cash$-$flow break$-$even level of sales higher or lower than the zero$-$profit $($accounting$)$ break$-$even point?

b$.$ If a project operates at its cash$-$flow break$-$even point for its entire life, is its NPV positive or negative?

a$.$ Is the cash$-$flow break$-$even level of sales higher or lower than the zero$-$profit $($accounting$)$ break$-$even point?

Higher

b$.$ If a project operates at its cash$-$flow break$-$even point for its entire life, is its NPV positive or negative?

Positive

Negative