Break-even revenues on an accounting basis typically indicate a:
A) negative NPV for the firm.
B) positive NPV for the firm.
C) high degree of operating leverage.
D)downturn in the business cycle.

Question

Quizplus · Accepted Answer

Break-even revenues on an accounting basis mean that total revenues equal total costs, resulting in zero profit. This implies that the net present value (NPV) is zero or negative, as there are no excess returns above the cost of capital.

Break-Even Revenues on an Accounting Basis Typically Indicate A