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Question 47 3 pts Assume that the project is expected to return monetary benefits of $20,000...

Question 47 3 pts
Assume that the project is expected to return monetary benefits of $20,000 the first year, and increasing benefits of $5,000 until the end of project life (year 1 = $20,000, year 2 = $25,000, year 3 = $30,000). The project also has one-time costs of $30,000, and fixed recurring costs of $10,000 until the end of project life. The project has a discount rate of 8% and a three-year time horizon.

Calculate the break-even point for this project. Enter only the numeric value.

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Answer #1

Hence break even point is 2.5 year. In 2 and half years company will recover the cost in present value terms.

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