Question

ECONOMICS QUESTION ANSWER IN 30 MIN FOR THUMBS UP

Break-even analysis implies that

Question options:

	a project's benefits are higher than the project's costs in terms of present worth
	a project's costs are exactly equal to the project's benefits
	a project's benefits are lower or equal to the project's costs in terms of present worth
	the present worth of a project is equal to zero
	the present worth of a project is positive

Answer 1

Break even position comes at a point when the company's total revenue equal its cost.

Total Cost = Total Revenue while Benefits = Revenue - Cost

Producing more than break even will raise the total revenue of the firm and makes the situation of revenue > cost. Present worth says that the value of future project. Thus value of project after break even point is positive as revenue > cost which says that benefits are higher (Revenue - cost). After break even point, present benefit is greater than present cost. Thus option C is correct.