Question
When a project breaks even on an accounting basis, the cash flow for that period will equal Blank______.
Multiple choice question.
net working capital for that period
the depreciation allowance for that period
revenues for that period
net income for that period
Multiple choice question.
net working capital for that period
the depreciation allowance for that period
revenues for that period
net income for that period
Answers
GPT-4o mini
When a project breaks even on an accounting basis, the cash flow for that period will equal **the depreciation allowance for that period**.
This is because at the break-even point, total revenues equal total expenses, resulting in zero net income. However, cash flow takes into account non-cash expenses like depreciation, which means the cash flow for the period will reflect the depreciation added back to the net income.
This is because at the break-even point, total revenues equal total expenses, resulting in zero net income. However, cash flow takes into account non-cash expenses like depreciation, which means the cash flow for the period will reflect the depreciation added back to the net income.