Which of the Following Is NOT a Correct Statement Regarding

question 383

Multiple Choice

Which of the following is NOT a correct statement regarding break-even?

• A) Accounting break-even is the sales level that results in zero project net income.
• B) The cash break-even is the sales level that results in zero OCF.
• C) The financial break-even is the sales level that results in zero NPV.
• D) If there is depreciation the cash break-even will exceed the accounting break-even.
• E) Of the three break-evens, the financial break-even point is typically the highest.

---

Definitions:

Financial Institution

An establishment that conducts financial transactions such as investments, loans, and deposits.

Provincial Governments

The governing authorities of regions or provinces within a country, responsible for administering regional laws and policies.

Trust Companies

Financial institutions that act as agents for a trust to manage assets, execute trusts, and administer estates on behalf of their beneficiaries.

Agency Problems

Conflicts of interest between the principals (owners or shareholders) and agents (managers) of a company, often arising from differing motives or information asymmetry.