A Project That Just Breaks Even on an Accounting Basis

question 380

Multiple Choice

A project that just breaks even on an accounting basis _________________.

• A) Does not pay back.
• B) Will exactly pay back by the end of the project.
• C) Will pay back prior to the end of the project.
• D) Will break even on a financial basis as well.
• E) Will break even on a cash basis as well.

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Definitions:

Revaluation

The process of reassessing the value of assets or liabilities, leading to adjustments in their carrying amount on the balance sheet.

Consolidation Adjustment

Adjustments made to convert individual financial statements of parent and subsidiary companies into consolidated financial statements.

Contingent Liability

A potential financial obligation that may arise in the future, dependent on the outcome of a specific event.

Business Combination

A merger or acquisition in which separate companies come together to form a single entity, often to enjoy strategic advantages or to expand their market reach.