Which of the Following Will Lower the Breakeven Point

question 71

Multiple Choice

Which of the following will lower the breakeven point?

• A) a decrease in the sales price per unit
• B) an increase in total fixed costs
• C) an increase in the variable cost per unit
• D) an increase in the sales price per unit

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Definitions:

Cash Inflows

The total amount of money being transferred into a business, typically from operational, investment, and financing activities.

Profitability Index

A calculation used to determine the relative profitability of an investment, defined as the present value of future cash flows divided by the initial investment cost.

Discount Rate

The discount rate used in DCF method to establish the current worth of future financial flows.

Independent Projects

Investment projects that do not affect the cash flows or feasibility of other projects under consideration.