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