A Company's Break-Even Point Will Not Be Increased By

question 22

Multiple Choice

A company's break-even point will not be increased by:

• A)an increase in total fixed costs.
• B)a decrease in the selling price per unit.
• C)an increase in the variable cost per unit.
• D)a decrease in the contribution margin ratio.
• E)an increase in the number of units produced and sold.

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Definitions:

Independent

Not influenced or controlled by others in matters of opinion, conduct; not depending on another's authority.

Return on Assets

A financial ratio that shows the percentage of profit a company earns in relation to its overall resources (total assets).

Net Present Value

In capital budgeting, this refers to the variance between the current value of incoming cash and the current value of outgoing cash across a specific period, utilized to determine an investment's profit potential.

Present Value

The contemporary value of money expected to be received in the future or a flow of cash, discounted by a certain rate of return.