The NPV Break-Even Operating Cash Flow Is

question 84

Multiple Choice

The NPV break-even operating cash flow is:

• A)the level of annual operating cash flow required for a project to produce an operating profit of zero.
• B)the level of annual operating cash flow required for a project to produce an NPV of zero.
• C)the level of annual operating cash flow required for a project to produce an NPV close to zero.
• D)the level of annual operating cash flow required for a project to produce an accounting profit of zero.

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Definitions:

Direct Labor Cost

The total cost of all labor directly involved in the production of goods or services, which can be easily traced to the product.

Equivalent Units

A technique in cost accounting used to allocate costs to partially completed goods, expressed in terms of fully completed units.

FIFO Method

Another term for FIFO, emphasizing its role as an accounting method where the oldest inventory items are recorded as sold first.

Equivalent Unit

A concept in cost accounting used to allocate costs to partially completed goods, converting them into the amount of finished goods units that could have been produced with the same amount of input.