The Present Value Break-Even Point Is Superior to the Accounting

question 19

Multiple Choice

The present value break-even point is superior to the accounting break-even point because:

• A) present value break-even is more complicated to calculate.
• B) present value break-even covers the economic opportunity costs of the investment.
• C) present value break-even is the same as sensitivity analysis.
• D) present value break-even covers the fixed costs of production, which the accounting break-even does not.
• E) present value break-even covers the variable costs of production, which the accounting break-even does not.

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