Needles, Inc

question 91

Multiple Choice

Needles, Inc.was evaluating its margin of safety.Which one of the following is true?

• A)The break-even point is not relevant.
• B)The higher the ratio, the greater the margin of safety.
• C)The higher the dollar amount, the lower the margin of safety.
• D)The higher the ratio, the lower the fixed costs.

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Definitions:

Common-base Year Financial Statement

A financial analysis technique where all values are presented relative to a specified base year, facilitating comparison over time.

Base Amount

The initial sum of money used as a reference or starting point for calculations, often related to financial calculations or transactions.

Sources of Cash

Various origins from which a business or individual can obtain funds, including operations, financing, and investing activities.

Use of Cash

Describes the various ways a company or an individual applies their available cash, including operations, investments, and financing activities.