Use the Figure for the Question(s) Below

question 63

Multiple Choice

Use the figure for the question(s) below.

-The graph above shows the break-even analysis for the cost of making a certain good. Based on this chart, which of the following is true?

• A) The net present value (NP
• V) of the project increases with increased cost of goods sold.
• B) The net present value (NP
• V) of the project will be positive if the cost of good sold is greater than $110.
• C) If the good costs $110 to make, the net present value (NP
• V) of the project will be zero.
• D) The project should not be undertaken if the predicted cost of goods sold is less than $110.

---

Definitions:

Draft

A preliminary version of a document or plan, subject to revisions and corrections.

Instrument

A legal document that formalizes an agreement or right, often used in financial and property transactions.

Maker

A person obligated as the payor on a promissory note. See also comaker.

Bearer Note

A type of fixed-income security that is not registered by the issuer, allowing any holder in possession to collect on it.