Annual depreciation expense-cash flow breakeven point

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A venture has fixed expenses of $1 million, including $100 thousand of annual depreciation expense. It has variable expenses equal to 25% of revenue. The venture’s net income breakeven point is about $1,333,300, which is above its cash flow breakeven point. If the venture expects to achieve first year sale to $1,100,000, it will fall short of a breakeven level of cash by $75,000. Is this true, false or uncertain? Explain.

Reference no: EM131051029

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