Which One of the Following Statements Is Correct When a Project

question 14

Multiple Choice

Which one of the following statements is correct when a project is operating at its accounting profit break-even point?

• A)The project is just recovering the cost of the initial investment.
• B)The aftertax profit is equal to the initial investment.
• C)The project just pays back on a discounted basis.
• D)The project's IRR is equal to zero.
• E)The contribution margin is equal to zero.

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Definitions:

Mutually Beneficial Trade

Trade agreements between parties that provide gains or advantages to all involved, enhancing each party's welfare.

Relative Cheaper

The comparison of the cost of one product or service to another, indicating that the former is less expensive.

Labor-Intensive

Describing a process or industry that requires a large amount of labor to produce its goods or services.

Comparative Advantage

The ability of a country or firm to produce a particular good or service at a lower opportunity cost than its competitors, which enhances efficiency in international trade.