ABC Ltd is considering a new project with a 10-year lifespan that will likely generate $80,000 in sales per year. The project requires an initial investment of $200,000 in equipment. The estimated fixed cost is $15,000 per year, and the variable cost is $16,000 per year. The estimated quantity of sales is 8,000 units per year. Assume all payments and receipts are made in cash. Other than where already indicated, assume cash flows occur at the end of the year. There is no tax. The estimated required rate of return (cost of capital k) is 10% p.a.

a) Calculate the NPV of this project (4 marks)

b) Compute the NPV-based breakeven price per unit. (8 marks)

c) Compute the NPV-based breakeven quantity of sales. (8 marks)