Which One of the Following Is (Are) Considered as a Limitation

question 162

Multiple Choice

Which one of the following is (are) considered as a limitation of break-even analysis?

• A) It assumes that the firm faces linear or nonvarying sales revenue and total operating cost functions.
• B) It has a short-term time horizon.
• C) It is difficult to break semivariable costs into fixed and variable components.
• D) All of the above.

---

Definitions:

Business Automobile

A vehicle primarily used for business activities and purposes, which may qualify for tax deductions related to its use.

Rental Property

Real estate that is owned with the intention of earning income from renting it out to tenants rather than personal use.

Standard Mileage Rate

The rate set by the IRS that taxpayers may use to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes.

Depreciation

The process of allocating the cost of a tangible or physical asset over its useful life, recognizing it as an expense over time in financial statements.