All Else Equal, an Increase in Fixed Costs

question 42

Multiple Choice

All else equal, an increase in fixed costs
I.increases the break-even point based on NPV;
II.increases the accounting break-even point;
III.decreases the break-even point based on NPV;
IV.decreases the accounting break-even point

• A)I and IV only
• B)III and IV only
• C)II and III only
• D)I and II only

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Definitions:

Franchise

The right or license granted to an individual or group to market a company’s goods or services.

License

A legal authorization allowing an individual or entity to use a piece of property or engage in a particular activity or business.

Decentralized Company

A decentralized company allows for decision-making authority to be distributed among various levels within the organization rather than being concentrated at the top.

Decision Making

Choosing among alternative actions; a component inherent in the other management processes of planning, directing, controlling, and improving.