Break-Even Analysis Refers to

question 4

Multiple Choice

Break-even analysis refers to

• A) the total number of products that will be sold.
• B) the total dollar value of sales for the year.
• C) cash flow.
• D) the level of sales (dollar value and number of products) needed to cover all costs.
• E) proforma.

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Definitions:

Amortization

The method of slowly deducting the initial value of an asset over time.

Salvage Value

The appreciated remaining value of an asset as it reaches the end of its effective use period.

Extraordinary Repairs

Major repairs that extend the useful life of an asset significantly beyond its original forecast and are not incurred regularly.

Leasehold Improvements

Alterations or enhancements made to rental premises by a lessee in order to customize the space for their specific use.