Reconsider Fine fodder's new superstore. Suppose that by investing an additional $600,000 initially in more efficient checkout equipment, Fine fodder could reduce variable costs to 80% of sales.

a. Using the base-case assumptions (Table 10.1), find the NPV of this alternative scheme.

b. At what level of sales will accounting profits be unchanged if the firm invests in the new equipment? Assume the equipment receives the same 12-year straight-line depreciation treatment as in the original example.

c. What is the NPV break-even point?