Which one of the following statements is true concerning break-even points?
A) The cash break-even quantity is equal to (FC + D)/(P - v).
B) At the accounting break-even point, a project never pays back the initial investment.
C) The ﬁnancial break-even point is generally higher than the accounting break-even point.
D) The IRR is just equal to the required return at the cash break-even point.
E) The ﬁnancial manager is more interested in the cash break-even point than in the ﬁnancial or accounting break-even points.

Question

Quizplus · Accepted Answer

The financial break-even point is generally higher than the accounting break-even point because it includes the required return on investment, not just covering fixed and variable costs.

Which One of the Following Statements Is True Concerning Break-Even