The break-even salvage value of a particular project is the salvage value necessary to:
A) offset any losses incurred by the subsidiary in a given year.
B) offset any losses incurred by the MNC overall in a given year.
C) make the project have zero profits.
D) achieve a zero net present value for the project.

Question

The break-even salvage value of a particular project is the salvage value necessary to:​
A) ​offset any losses incurred by the subsidiary in a given year.
B) ​offset any losses incurred by the MNC overall in a given year.
C) ​make the project have zero profits.
D) ​achieve a zero net present value for the project.

Quizplus · Accepted Answer

The break-even salvage value is the salvage value that results in a zero net present value for the project. This means that at this salvage value, the project is neither generating profits nor incurring losses, making it a break-even point for the project. Therefore, the correct option is D.

The Break-Even Salvage Value of a Particular Project Is the Salvage