Which One of the Following Is a Consideration of CVP

question 87

Multiple Choice

Which one of the following is a consideration of CVP analysis?

• A)The level of activity must remain constant over the relevant range.
• B)Total fixed costs remain constant over the relevant range.
• C)Total variable costs remain constant over the relevant range.
• D)Cost behaviour can change as long as total costs remain the same at all activity levels.

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Definitions:

Default Risk

The risk of loss arising from a debtor failing to make required payments on their debt obligation.

Cost Of Borrowing

The total expense that a borrower pays to secure and utilize a loan, including interest rates, fees, and other charges.

Revolving Loan

A loan that provides the borrower with the ability to draw down, repay, and re-borrow funds up to a designated amount over a given period.

Prime Interest

The interest rate that commercial banks charge their most creditworthy customers, often used as a reference rate for loans.