Which of the Following Best Describe the Term Accounting Break-Even

question 89

Multiple Choice

Which of the following best describe the term accounting break-even.

• A) The sales level that results in zero project net income.
• B) The sales level where operating cash flow is equal to zero.
• C) Costs that change when the quantity of output changes.
• D) Options for future, related business products or strategies.
• E) A combination of scenario and sensitivity analyses.

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Definitions:

Law of Diminishing

A principle stating that as more units of a variable input are added to fixed inputs, the additional output from each new unit of input eventually decreases.

Implicit Costs

The opportunity costs associated with a company's own resources, not directly paid for with cash but are the result of using assets instead of investing them elsewhere.

Economic Profit

The difference between total revenue and the total costs, including both explicit and implicit costs, unlike accounting profit which only considers explicit costs.

Explicit Costs

Direct financial payments made to acquire resources or services for business operations.