A Project Has an Accounting Break-Even Point of 1,600 Units

question 221

Multiple Choice

A project has an accounting break-even point of 1,600 units. The fixed costs are $3,200 and the depreciation expense is $200. The projected variable cost per unit is $20.50. What is the projected sales price?

• A) $9.65
• B) $14.75
• C) $18.35
• D) $20.50
• E) $22.63

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Definitions:

Earnings Rate

The rate of return on an investment or project, often expressed as a percentage of the investment's cost.

Compound Interest

This refers to the calculation of interest on the beginning balance of a loan or deposit, adding in the interest that has built up over time from prior periods.

Present Value

The value as of now of a future amount of money or subsequent cash flows, based on a chosen return rate.

Compound Interest

Interest that is determined by taking into account not only the original principal of a deposit or loan but also all the interest that has been compounded in previous cycles.