If a fiRm's fiXed Costs Are Exactly Equal to Its

question 277

Multiple Choice

If a firm's fixed costs are exactly equal to its depreciation expense, and both are greater than zero, then at its accounting break-even point the DOL _______________.

• A) Is equal to one.
• B) Is equal to two.
• C) Is greater than two.
• D) Is undefined since you can't divide by zero.
• E) Cannot be determined without more information.

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