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.

Question

Quizplus · Accepted Answer

The NPV break-even point occurs when the present value of inflows line cuts the present value of outflows line, indicating that the cash inflows are sufficient to cover the initial investment and all associated costs. This point represents the point of zero net present value, where the project's total inflows are equal to its total outflows.

The NPV Break-Even Point Occurs When