Chapter 11, Problem 16E

To determine

Concept introduction:

Break-even time:

Break-even time can be defined as the total time required to earn total revenue which equals the total costs such that there is neither income nor loss respectively.

Payback period:

Payback period can be defined as the number of time periods required to earn or payback the initial investment cost for the project.

To explain:

To explain the advantages of break-even time over the payback period. Any two situations under which payback period and break-even time are similar.