Firms often calculate a project's break-even sales using accounting profit. However, break-even sales based on NPV is generally
A)higher than the one calculated using accounting profit.
B)lower than the one calculated using accounting profit.
C)equal to the one calculated using accounting profit.
D)not related to the one calculated using accounting profit.

Question

Quizplus · Accepted Answer

Break-even sales based on NPV is generally higher because it accounts for the time value of money, requiring more sales to cover the initial investment and achieve a net present value of zero.

Firms Often Calculate a Project's Break-Even Sales Using Accounting Profit