All Else Constant, the Accounting Break-Even Level of Sales Will

question 213

Multiple Choice

All else constant, the accounting break-even level of sales will decrease when the:

• A) Fixed costs increase.
• B) Depreciation expense decreases.
• C) Contribution margin decreases.
• D) Variable costs per unit increase.
• E) Selling price per unit decreases.

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Definitions:

Annual Dividend

The total amount of dividends a company pays to its shareholders in one year, usually presented on a per share basis.

WACC

Weighted Average Cost of Capital; a calculation of a company's cost of capital in which each category of capital is proportionately weighted.

Corporate WACC

The weighted average cost of capital for a corporation, reflecting the cost of its equity and debt financing.

IRR

Internal Rate of Return is a metric used in financial analysis to estimate the profitability of potential investments, representing the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.