A Project That Simply Breaks Even on an Accounting Basis

question 63

True/False

A project that simply breaks even on an accounting basis gives you your money back but does not cover the opportunity cost of the capital tied up in the project.

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Definitions:

Impairment Review

An examination of assets to determine if their carrying value exceeds their recoverable amount, potentially leading to an impairment loss.

Property, Plant

Property, Plant, and Equipment (PP&E) are long-term tangible assets used in the operation of a business and not intended for sale.

Significant Change

A major alteration or transformation in a situation, process, or condition.

Activity Depreciation Method

A method of calculating the depreciation of an asset based on its usage, activities, or units of production rather than the passage of time.