The term "breakeven after-tax cash flow" represents:

Question

Quizplus · Accepted Answer

Breakeven after-tax cash flow is the minimum annual after-tax cash inflows needed for an investment project to be deemed acceptable in a present-value sense. It represents the point at which the present value of cash inflows equals the present value of cash outflows, resulting in a net present value of zero. Therefore, option E is the correct answer. Options A and B are incorrect since the breakeven after-tax cash flow is not related to optimism or pessimism in scenario analysis. Option C is also incorrect since the breakeven after-tax cash flow is not equal to a project's IRR. Option D is incorrect because the cash flow needed to generate an IRR of zero is not relevant to the concept of breakeven after-tax cash flow.

The Term "Breakeven After-Tax Cash Flow" Represents