The difference between an NPV break-even level of sales and an accounting break-even level of sales is:
A)The consideration of opportunity cost
B)The consideration of depreciation expense
C)Allowing the sales level to vary in response to changes in demand
D)The inclusion of income taxes

Question

Quizplus · Accepted Answer

The NPV break-even level of sales factors in the opportunity cost, which is the cost of the next-best alternative forgone, while the accounting break-even level of sales only considers the fixed and variable costs associated with the production of goods or services. The other options (B, C, and D) do not differentiate between the two types of break-even analyses.

The Difference Between an NPV Break-Even Level of Sales and an Accounting