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The Financial Break-Even Point Is Superior to the Accounting Break-Even

Question 29

Multiple Choice

The financial break-even point is superior to the accounting break-even point because the financial break-even method:


A) is more complicated to calculate.
B) covers the economic opportunity costs of the investment.
C) is equivalent to sensitivity analysis.
D) covers the fixed costs of production,which the accounting break-even does not.
E) provides an economic profit over and above the required rate of return.

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