Question: New business is evaluating a new project that has initial investment of $150 million. Project will generate a total cash inflow of $30 million per

New business is evaluating a new project that has initial investment of $150 million. Project will generate a total cash inflow of $30 million per year for each of the 10 years of the project. Tax rate is 50%. Cost of capital is 10%. CFO estimates that if they sell 85098 cars, they will attain financial breakeven with zero NPV. Which of the following will be true if the tax rate is lowered to 20%?

A. It will not impact the financial breakeven

B. They will have to sell more than 85098 cars to attain financial breakeven

C. They will have to sell less than 85,098 cars to attain financial breakeven

D. They will have to sell 100,000 cars for financial breakeven

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