The fiNancial Break-Even Identifies the Minimum Level of Sales Quantity

question 347

Multiple Choice

The financial break-even identifies the minimum level of sales quantity required to:

• A) Accept a project based on the net present value.
• B) Accept a project based on the accounting rate of return.
• C) Have cash inflows equal cash outflows.
• D) Have a positive internal rate of return.
• E) Cause the operating cash flow to equal zero.

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Definitions:

Corpus

The principal amount in a trust or estate as distinct from interest or dividends earned on that principal amount.

Holographic

Referencing a document, especially a will, entirely written in the handwriting of the person whose signature it bears, often exempt from normally required formalities.

Nuncupative

Pertains to a will that is declared orally by the testator in the presence of witnesses, usually under circumstances where a written will cannot be produced.

Prudence

Exercising caution or care in the management of resources or decision-making to avoid unnecessary risks.