Which of the following statements is true of the economic break-even point?
A) It is the number of units that must be sold for accounting operating profit to equal $0.
B) It is the level of unit sales at which cash flows or profitability for one project alternative switches from being lower than that of another alternative to being higher.
C) It is the number of units that must be sold each year during the life of a project so that the NPV of a project equals $0.
D) It is the number of units that must be sold for pretax operating cash flow to be $0.

Question

Quizplus · Accepted Answer

The economic break-even point refers to the number of units that must be sold for the Net Present Value (NPV) of a project to equal $0. This means the project neither loses nor gains value, indicating the point at which an investment starts to generate profit.

Which of the Following Statements Is True of the Economic