The economic break-even point of a project can be found by:
A) setting the discount rate equal to the DOL.
B) solving for the annual sales that will equate total revenue with total cost.
C) solving for the annual sales that will give the project an NPV of zero.
D) solving for the level of sales that will give the project an IRR of zero.

Question

Quizplus · Accepted Answer

The economic break-even point is the level of sales at which the project's net present value (NPV) is zero, meaning the project covers all its costs, including the cost of capital.

The Economic Break-Even Point of a Project Can Be Found