A project that just breaks even on an accounting basis _________________.
A) Does not pay back.
B) Will exactly pay back by the end of the project.
C) Will pay back prior to the end of the project.
D) Will break even on a financial basis as well.
E) Will break even on a cash basis as well.

Question

Quizplus · Accepted Answer

A project that breaks even on an accounting basis means that its total revenues equal its total expenses, including non-cash expenses like depreciation. Therefore, it will exactly pay back by the end of the project, covering all costs but not necessarily generating a profit.

A Project That Just Breaks Even on an Accounting Basis