A Company Is Considering a Project with a Cash Break-Even

question 3

Multiple Choice

A company is considering a project with a cash break-even point of 14,500 units. The selling price is $14 a unit and the variable cost per unit is $8. What is the projected amount of fixed costs?

• A) $87,000
• B) $94,000
• C) $109,000
• D) $116,000
• E) $203,000

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Definitions:

Turnover

A measure of how quickly assets, such as inventory or investments, are converted into sales or revenue within a given period.

Investment Opportunity

A situation where an individual or company can invest in a project or asset with the expectation of generating a favorable return.

Manufacturing Cycle Efficiency (MCE)

A metric that measures the efficiency of the manufacturing process, specifically the proportion of value-added time to total production time.

Throughput Time

The total time taken to manufacture a product from start to finish, including processing, waiting, and transport times.