# Project sales to reach: NPV break even, cash flow break even

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MBC Corporation is considering investing in a new project. The project has a life of 10 years requires an initial investment of $180,000. The fixed operating cost is expected to be $36,000 and variable cost is expected to be 40% of sales. The required rate of return is 11%.

a) How much annual sales the project must produce to reach NPV break-even?

b) How much annual sales the project must produce to reach cash flow break-even?

c) Redo part (a) assuming there is a net salvage value of $18,000 at the end of the project's life.

Â© BrainMass Inc. brainmass.com March 4, 2021, 10:28 pm ad1c9bdddfhttps://brainmass.com/business/net-present-value/project-sales-reach-npv-break-even-cash-flow-break-even-334573

#### Solution Preview

Given that,

Initial Investment=$180,000

Fixed operating cost=$36,000

Variable operating cost=40% of sales

Life of the ...

#### Solution Summary

The expert examines project sales to reach the NPV break even and cash flow break even.

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