Which one of the following sets of conditions represents the more suitable investment?
A) Total revenues cover fixed and variable costs.
B) An investment breaks even in an accounting sense.
C) An investment breaks even in an economic sense.
D) Total revenues exceed the costs of goods sold.

Question

Quizplus · Accepted Answer

Breaking even in an economic sense means that the investment is generating enough revenue to cover all of its costs, including a return on the investment. This ensures that the investment is profitable and sustainable in the long run. Option A only considers variable and fixed costs, while option B only considers accounting costs. Option D only considers the cost of goods sold, which is not enough to make a determination about overall profitability.

Which One of the Following Sets of Conditions Represents the More