If Forecasted Sales Exceed the Break-Even Level but Are Less

question 48

Multiple Choice

If forecasted sales exceed the break-even level but are less than the NPV break-even level, the project has a:

• A)positive NPV but earns less than the discount rate.
• B)negative NPV but earns more than the discount rate.
• C)net loss on the income statement.
• D)net profit on the income statement.

---

Definitions:

Risky Shift

The tendency for a group decision to be riskier than the average decision made by the individual group members.

Altruistic Behavior

Actions intended to benefit others without expectation of reward.

Personally Responsible

Being accountable for one's actions or duties, recognizing one's role in the outcomes of those actions.

Uncertain

A state of having limited knowledge where it is impossible to exactly describe the existing state, a future outcome, or more than one possible outcome.