A project that just breaks even on an accounting basis will not pay back.

Question

Quizplus · Accepted Answer

Breaking even on an accounting basis means that the project's revenues are equal to its expenses, not considering the time value of money. This does not inherently mean it will not pay back; it simply means it is not generating profit beyond its costs within the accounting period considered. Payback period analysis, however, is concerned with the time it takes for the initial investment to be recovered through cash inflows, which can still occur in a break-even scenario.

A Project That Just Breaks Even on an Accounting Basis