A break-even analysis has several drawbacks including the fact that it ignores the importance of cash flows and that its accuracy is dependent on the accuracy of revenue and expense estimates.

Question

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A break-even analysis only takes into account the point at which revenue equals expenses, without considering cash flow. Additionally, the accuracy of the analysis is dependent on the accuracy of revenue and expense projections, which may be subject to unexpected changes or uncertainties.

A Break-Even Analysis Has Several Drawbacks Including the Fact That