The fiNancial Break-Even Point Is Defined as the Point Where

question 311

Multiple Choice

The financial break-even point is defined as the point where the quantity is equal to:

• A) (Fixed costs + depreciation)/(price per unit - variable cost per unit).
• B) (Fixed costs + depreciation + the operating cash flow that produces a zero net present value)/(price per unit - variable cost per unit).
• C) (Price per unit - variable cost per unit)/(fixed costs + depreciation).
• D) (Price per unit - variable cost per unit)/(fixed costs + the operating cash flow that produces a zero net present value).
• E) (Fixed costs + the operating cash flow that produces a zero net present value)/(price per unit - variable cost per unit).

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Definitions:

Comparative Income Statement

A financial statement that compares income, expenses, and net profits over different periods to show performance trends.

Net Income

The total earnings or profit of a person or company after all expenses and taxes have been subtracted from gross income.

Owners' Equity

Refers to the residual interest in the assets of an entity after deducting liabilities, representing the capital belonging to the owners or shareholders.

Total Liabilities

The combined amount of all debts and obligations a company owes to outside parties at a given time.