Potential applications of the break-even model include
A) replacement for time-adjusted capital budgeting techniques.
B) pricing policy.
C) optimizing the cash-marketable securities position of a firm.
D) all of the above.

Question

Quizplus · Accepted Answer

The break-even model is primarily used for determining the minimum sales volume required to cover all costs and expenses. Therefore, it is most relevant to pricing policy decisions, such as setting the minimum price for a product or service to ensure profitability. While it may also be useful for capital budgeting and cash management decisions, it would not necessarily replace other techniques used for those purposes.

Potential Applications of the Break-Even Model Include