At the Cash Break-Even Point, a Multi-Year Project Has a Net

question 297

Multiple Choice

At the cash break-even point, a multi-year project has a net present value that is equal to:

• A) Fixed costs.
• B) The initial cash outlay.
• C) The annual depreciation expense.
• D) The contribution margin.
• E) Zero.

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Definitions:

Financial Capital

Refers to the funds provided by lenders (and investors) to businesses to purchase real capital equipment for producing goods/services.

Raw Materials

Basic materials that are processed or refined to create goods and products in various industries.

Soviet Union

A former federation of Communist republics that was established in 1922 and dissolved in 1991, consisting of Russia and several other countries in Eurasia.

Supply

The aggregate quantity of a product or service that can be bought at any specific price point within a particular market.