If a project fails to break even from a pretax operating cash flow perspective, then the firm is going to have to put more cash into the project to keep it going.

Question

Quizplus · Accepted Answer

If the project is not generating enough cash flow to cover its operating costs, the firm will have to inject more cash into the project to sustain it. This is necessary to avoid defaulting on any outstanding debts associated with the project and to prevent the project from being shut down.

If a Project Fails to Break Even from a Pretax