The Accounting Break-Even Point Is That Level of Sales Where

question 75

Multiple Choice

The accounting break-even point is that level of sales where:

• A)sales revenue equals variable costs.
• B)sales revenue equals variable plus fixed costs.
• C)EBIT equals depreciation expense, and, thus cash flow equals zero.
• D)EBIT equals zero.

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Definitions:

Underpricing

The phenomenon where new securities, such as stocks or bonds, are priced below their true market value at the initial offering, often leading to an immediate increase in their value when traded.

Equity Include

The incorporation of ownership interest or stake in a company through the holding of its equity or stocks.

Seasoned Equity Offering

An issuance of stock by a company after its initial public offering to raise additional capital.

Proportionate Ownership

An ownership interest that reflects a shareholder's or investor's percentage share in the assets and profits of a company.