Industrial Engineering · Break-Even Analysis
Which of the following is a major limitation of conventional break-even analysis?
- 1It can only be applied under conditions of perfect competition.
- 2It assumes non-linear behaviour of costs as standard.
- 3It does not take the capital employed into account.
- 4It is a static concept assuming linear cost-volume relationships.✓
Correct answer
It is a static concept assuming linear cost-volume relationships.
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