Which one of the following occurs at the accounting break-even level of sales?
A) The operating cash ﬂow is equal to zero.
B) The net present value is positive.
C) The project never pays back.
D) The operating cash ﬂow is equal to depreciation.
E) The net present value is equal to zero.

Question

Quizplus · Accepted Answer

At the accounting break-even level of sales, the operating cash flow is equal to the fixed cost and depreciation, which means that the operating cash flow is equal to depreciation. Therefore, choice D is the correct answer. The other choices are not necessarily true at the accounting break-even level of sales.

Which One of the Following Occurs at the Accounting Break-Even