Webster Iron Works Started a New Project Last Year

question 40

Multiple Choice

Webster Iron Works started a new project last year. As it turns out, the project has been operating at its accounting break-even level of output and is now expected to continue at that level over its lifetime. Given this, you know that the project:

• A) will never pay back.
• B) has a zero net present value.
• C) is operating at a higher level than if it were operating at its cash break-even level.
• D) is operating at a higher level than if it were operating at its financial break-even level.
• E) is lowering the total net income of the firm.