Which of the following differentiates accounting operating profit break-even point from pre-tax operating cash flow break-even point?
A) Accounting operating profit break-even point includes interest expense in the numerator, whereas pre-tax operating cash flow does not.
B) Pre-tax operating cash flow break-even point includes income taxes in the denominator, whereas accounting operating profit break-even point does not.
C) Accounting operating profit break-even point includes depreciation & amortization in the numerator, whereas pre-tax operating cash flow does not.
D) Pre-tax operating cash flow break-even point includes interest expense in the numerator, whereas accounting operating profit break-even point does not.

Question

Quizplus · Accepted Answer

Accounting operating profit break-even point includes depreciation & amortization in the numerator, whereas pre-tax operating cash flow does not. This is because accounting operating profit considers non-cash expenses like depreciation and amortization, while pre-tax operating cash flow only includes cash inflows and outflows.

Which of the Following Differentiates Accounting Operating Profit Break-Even Point