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 depreciation. This is because at the accounting break-even point, the company generates just enough revenue to cover its operating expenses, including depreciation, but does not make a profit beyond that.

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