Cash breakeven point is a production level

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Reference no: EM131176594

Suppose it has been determined that the cash breakeven point is a production level of 5,000 units per year, the accounting breakeven point is a production level of 8,000 units per year, and the financial breakeven point is a production level of 12, 000 units per year. If the production level is expected to remain at 6,500 units per year for the balance of the life of a project, what would be the proper course of action to take?

a. Shut down the project because it is operating below the accounting breakeven point.

b. Shut down the project because it is operating below the financial breakeven point.

c. Continue operating the project because it is above the cash breakeven point.

Reference no: EM131176594

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