Which Statement Is True Regarding Using Interest-Adjusted Cost Data and Purchasing

question 18

Multiple Choice

Which statement is true regarding using interest-adjusted cost data and purchasing life insurance?

• A)Interest adjusted cost data cannot be used to analyze whole life policies.
• B)The type of policy you purchase should he based solely on a cost index.
• C)Small variations in cost indices should be ignored.
• D)Cost indices should be used to select an insurer,not an individual policy.

Understand the concept of break-even point and how it is calculated in units and dollars.

Calculate the impact of changes in variable costs, fixed costs, and sales volume on net operating income.

Calculate the effect of changing selling prices and advertising expenses on net operating income.

Understand the concept of margin of safety and how it is calculated.