If Fixed Expenses Were the Same and Contribution Margin Per

question 131

Multiple Choice

If fixed expenses were the same and contribution margin per unit was cut in half, then the break- even point would:

• A) be the same
• B) be undeterminable
• C) double
• D) be cut in half

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Definitions:

Expected Capital Gains Yield

The anticipated return from an increase in the price of an investment, not including dividends or interest.

Constant

A fixed value that does not change in mathematical expressions or in the formulation of algorithms and calculations.

Expected Dividend

The projected payment a company is expected to distribute to its shareholders from its earnings.

Market Risk Premium

The market risk premium is the additional return an investor expects from holding a risky market portfolio instead of risk-free assets.