The NPV Break-Even Point Occurs When

question 59

Multiple Choice

The NPV break-even point occurs when

• A)the present value of inflows line cuts the present value of outflows line.
• B)the total revenue line cuts the fixed cost line.
• C)the total revenue line cuts the total cost line.
• D)the present value of inflows cuts the total cost line.

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Definitions:

Currency Exchange Rate

The value of one currency for the purpose of conversion to another, determining how much one currency is worth in terms of another.

Licensing

A business arrangement in which one party allows another to use its trademark, patent, or technology in exchange for a fee or royalty.

Franchising

A method of doing business wherein a franchisor licenses trademarks and proven methods of doing business to a franchisee in exchange for a recurring payment, and usually a percentage of gross sales or gross profits as well as the annual fees.

Indirect Exporting

The process of selling products to a foreign market through an intermediary, such as an export trading company or an export management company, rather than directly to the consumer or retailer.