The break-even time has which of the following characteristics?
i.It cannot be established until after the product development cycle is completed
ii.It encourages incremental projects.
iii.It discourages major projects that take a long time.iv.It measures cash flow not profit.

Question

Quizplus · Accepted Answer

The break-even time is the point at which the total revenue from a product or service equals the total cost of producing it. It is a measure of how long it will take for a company to recoup its investment in a new product or service.The break-even time cannot be established until after the product development cycle is completed because the company needs to know how much it will cost to produce the product or service before it can determine how long it will take to recoup its investment.The break-even time encourages incremental projects because it shows companies how long it will take to recoup their investment in a new product or service. This information can help companies make decisions about which projects to invest in.The break-even time discourages major projects that take a long time because it shows companies how long it will take to recoup their investment. This information can help companies make decisions about which projects to invest in.The break-even time measures cash flow, not profit. This is because the break-even time is the point at which the total revenue from a product or service equals the total cost of producing it. Profit is the difference between revenue and cost, so it is not measured by the break-even time.

The Break-Even Time Has Which of the Following Characteristics