The ﬁnancial break-even point is deﬁned as the point where the quantity is equal to:
A) (Fixed costs + depreciation)/(price per unit - variable cost per unit).
B) (Fixed costs + depreciation + the operating cash ﬂow that produces a zero net present value)/(price per unit - variable cost per unit).
C) (Price per unit - variable cost per unit)/(ﬁxed costs + depreciation).
D) (Price per unit - variable cost per unit)/(ﬁxed costs + the operating cash ﬂow that produces a zero net present value).
E) (Fixed costs + the operating cash ﬂow that produces a zero net present value)/(price per unit - variable cost per unit).

Question

Quizplus · Accepted Answer

The financial break-even point occurs when the operating cash flow is sufficient to cover fixed costs and achieve a zero net present value, which is represented by option E.

The ﬁNancial Break-Even Point Is Deﬁned as the Point Where