Mutually Exclusive Projects Are Projects Whose Cash Flows Are Unrelated

question 49

True/False

Mutually exclusive projects are projects whose cash flows are unrelated to one another; the acceptance of one does not eliminate the others from further consideration.

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Definitions:

Break-even Point

The level of production or sales at which total revenues equals total expenses, with no net loss or gain.

Contribution Margins

The amount remaining from sales revenue after all variable expenses have been deducted, indicating how much contributes to covering fixed costs and generating profit.

Cost-volume-profit Chart

A cost-volume-profit chart is a visual representation that shows how changes in a company's sales volume will affect its costs and profitability, facilitating breakeven and profit-target analysis.

Total Cost Line

A graphical representation showing the total cost associated with producing various levels of output.