A Project Has the Following Estimated Data: Price = $80

question 127

Multiple Choice

A project has the following estimated data: price = $80 per unit; variable costs = $55 per unit; fixed costs = $25,000; required return = 15%; initial investment = $44,000; life = five years. What is the
Cash break-even quantity?

• A) 1,000 units
• B) 1,352 units
• C) 1,525 units
• D) 1,775 units
• E) 1,950 units

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Definitions:

Large Number of Assets

Refers to having a substantial amount of different assets, typically to diversify and reduce risk.

Security Market Line

A line in the Capital Asset Pricing Model (CAPM) that represents the expected return of a security based on its systematic risk or beta.

Return Rate

The gain or loss on an investment over a specified period, expressed as a percentage of the investment’s initial cost.

Intercept Point

The exact point on a graph where two lines meet, often used in statistical analysis and economics.