If a firm tax rate is 40 percent what would your answer be? Now taxes are 40 percent of profits.Accounting break-even is unchanged,since taxes are zero when profits = 0.
To find NPV break-even,recalculate cash flow.
CF = (1 - T)(Revenue - Cash Expenses)+ T × Depreciation
= .60 (.25 × Sales - 2000)+ .40 × 600
= .15 × Sales - 960

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The Answer of If a firm tax rate is 40 percent what would your answer be? Now taxes are 40 percent of profits.Accounting break-even is unchanged,since taxes are zero when profits = 0.
To find NPV break-even,recalculate cash flow.
CF = (1 - T)(Revenue - Cash Expenses)+ T × Depreciation
= .60 (.25 × Sales - 2000)+ .40 × 600
= .15 × Sales - 960

If a Firm Tax Rate Is 40 Percent What Would