One of the limitations of breakeven analysis is its short-term time horizon. A large outlay in the current financial period could significantly raise the firm's breakeven point, while the benefits may occur over a period of years.

Question

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Breakeven analysis only takes into account short-term costs and revenues, meaning that it may not accurately reflect the long-term impacts of investments or changes in the business. Large investments in the present may temporarily raise the breakeven point even if they ultimately lead to greater profits in the future.

One of the Limitations of Breakeven Analysis Is Its Short-Term