Which One of the Following Statements Is True Concerning Break-Even

question 379

Multiple Choice

Which one of the following statements is true concerning break-even points?

• A) The cash break-even quantity is equal to (FC + D)/(P - v).
• B) At the accounting break-even point, a project never pays back the initial investment.
• C) The financial break-even point is generally higher than the accounting break-even point.
• D) The IRR is just equal to the required return at the cash break-even point.
• E) The financial manager is more interested in the cash break-even point than in the financial or accounting break-even points.

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Definitions:

Circular Mil

An area measure of wire determined by squaring the diameter of the wire in mils (1 mil = 0.001 inch). Example: A wire with a diameter of 0.020 inch would have a circular mil area of 400 cmil (20 x 20 = 400).

Radius

A straight line from the center to the circumference of a circle or sphere.

Diameter

A straight line passing from side to side through the center of a body or figure, especially a circle or sphere, measuring the overall distance across.

Standard Temperature

A baseline temperature used in scientific calculations, typically defined as 0°C or 273.15K.