BASIC INFORMATION: a Three-Year Project Will Cost $60,000 to Construct

question 324

Multiple Choice

BASIC INFORMATION: A three-year project will cost $60,000 to construct. This will be depreciated straight-line to zero over the three-year life. The price per unit sold is $20 and the variable cost per unit sold is $10. Fixed costs are $30,000 per year.

Using the BASIC INFORMATION, compute the cash break-even point. (Ignore taxes.)

• A) 1,800
• B) 3,000
• C) 4,200
• D) 5,000
• E) 7,000

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Definitions:

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