Identify a Disadvantage of Break-Even Analysis

question 240

Multiple Choice

Identify a disadvantage of break-even analysis.

• A) It cannot be used to determine the break-even point in dollars.
• B) It is not helpful for evaluating what might happen to profits in different market environments.
• C) It does not consider the effect of price on the quantity that consumers will want.
• D) It is not helpful for evaluating alternatives.
• E) It is an extremely complicated method.

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Definitions:

Natural Person

A living human individual recognized by law as having rights and obligations, as opposed to a legal entity like a corporation.

Limited Partnerships

A form of partnership consisting of one or more general partners, who manage the business and are personally liable for its debts, and one or more limited partners, who contribute capital and share profits but take no part in running the business and incur no liability beyond their investment.

Good-faith Effort

An honest attempt or endeavor made in a sincere and honest effort, without intent to defraud or seek unfair advantage.

Defective Merchandise

Products that are flawed or malfunctioning and do not meet the warranted or expected standard of performance or safety.