Which of the following does NOT correctly complete this sentence: A project that just breaks even in an accounting sense ___________________.
A) Will lose money in a ﬁnancial sense.
B) Will result in zero taxes paid.
C) Will not contribute to net income for the ﬁrm.
D) Will have a payback period less than the life of the project.
E) Will have operating cash ﬂow equal to depreciation expense.

Question

Quizplus · Accepted Answer

The statement "Will have a payback period less than the life of the project" does not logically follow from the fact that a project breaks even in an accounting sense. A project's payback period depends on the initial investment and the subsequent cash flows, while breaking even only means that the project's revenue equals its expenses. Therefore, D is the option that does not correctly complete the sentence.

Which of the Following Does NOT Correctly Complete This Sentence