Question: A project under consideration costs $ 180,000, has a five-year life and has no salvage value. Depreciation is a straight line. Sales are projected at

A project under consideration costs $ 180,000, has a five-year life and has no salvage value. Depreciation is a straight line. Sales are projected at 2,500 units per year. Price per unit is $120, the variable cost per unit is $80, and fixed costs are $92,000 per year. Assume that the operating cash flow that makes NPV equal to zero is $72,000.

What is the cash break-even sales level for this project?

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