In a financial break-even calculation, the payback period of the project is equal to the life of the project.

Question

Quizplus · Accepted Answer

The financial break-even point is when total revenues equal total costs, not necessarily when the initial investment is fully paid back, which is what the payback period measures. The life of the project can extend beyond the point where it becomes profitable or recoups its initial investment.

In a Financial Break-Even Calculation, the Payback Period of the Project