Question

"In order to conduct a cash break-even analysis, the analyst must add back depreciation from fixed costs.

A True
B False"

Answer 1

A cash break-even analysis is used to determine the point at which a business generates enough revenue to cover all of its costs and break even. The analyst needs to consider both fixed costs and variable costs, but depreciation is not added back to fixed costs in the analysis.

Step-by-step explanation:

A cash break-even analysis is used to determine the point at which a business generates enough revenue to cover all of its costs and break even. In this analysis, the analyst needs to consider both fixed costs and variable costs. Fixed costs are the costs that do not change regardless of the level of production, such as rent or depreciation. However, depreciation is not added back to fixed costs in the analysis. Instead, it is factored into the calculation of the break-even point.