For the following questions, assume no taxes and straight-line depreciation.
a. What is the cash break-even quantity, and how is it calculated? Use both words and an equation in your explanation. Include a discussion of payback period, NPV, and IRR at the cash break-even sales level.
b. What is the accounting break-even quantity, and how is it calculated? Use both words and an equation in your explanation. Include a discussion of payback period, NPV, and IRR at the accounting break-even sales level.
c. What is the financial break-even quantity, and how is it calculated? Explain using both words and an equation. Make sure that you discuss the two steps involved in finding the financial break-even point. Also, include a discussion of discounted payback period, NPV, and IRR at the financial break-even sales level.

Answer rating: 100% (QA)

a Cash Break Even Point is the quantity of sales required to cover all of the operating expenses It is the point which requires the volume of sales ju... View the full answer