The analysis technique that finds the amount of time required for the cumulative cash flow from a project to equal its initial and ongoing investment is referred to as:
A)return on investment (ROI)
B)break-even analysis (BEA)
C)net present value (NPV)
D)future value (FV)

Question

Quizplus · Accepted Answer

Break-even analysis (BEA) calculates the point at which the total revenue from a project equals the total cost, that is, when the cumulative cash flow equals the initial and ongoing investment. Therefore, BEA is the best answer for this question. ROI refers to the amount of profit generated by an investment and is not directly related to the break-even point. NPV and FV are both techniques used for evaluating investment opportunities and do not specifically calculate the break-even point.

The Analysis Technique That Finds the Amount of Time Required