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

question 400

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:

Goodwill

An intangible asset that arises when a company is purchased for more than the fair market value of its net assets, often attributed to reputation, brand, or intellectual property.

Entire Business

The complete operational structure of a company, including all assets, liabilities, operations, and activities.

Natural Resources

Resources that occur naturally in the environment and are utilized for economic gain, such as water, minerals, forests, and fossil fuels.

Land Improvements

Enhancements made to a plot of land to increase its value, which include landscaping, paving, and installing utilities.