Miller Brothers Has Determined That an Operating Cash flOw of $24,300

question 163

Multiple Choice

Miller Brothers has determined that an operating cash flow of $24,300 will result in a zero net
present value for a proposed project. The fixed costs of the project are $9,360 and the contribution
margin is $4.30. The company feels that it will capture 18 percent of the 60,000 unit market for this
product. Should the company develop the new product? Why or why not?

• A) Yes; because the financial break-even quantity is 7,828 units.
• B) Yes; because the financial break-even quantity is 8,001 units.
• C) Yes; because the anticipated market share exceeds the break-even quantity by 2,403
• units.
• D) No; because the financial break-even quantity is 7,828 units
• E) No; because the financial break-even quantity is 8,001 units

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Definitions:

Rational-Emotive Therapy

A cognitive-behavioral approach to psychotherapy focused on changing irrational beliefs to alter dysfunctional emotions and behaviors.

Cognitive-Behavioural Approach

is a psychotherapeutic treatment that helps patients understand the thoughts and feelings that influence behaviors, focusing on solving current problems and changing unhelpful thinking and behavior.

Psychodynamic Approaches

Psychological theories and therapies that focus on unconscious processes and childhood experiences.

Subjective Experiences

Personal, individual perceptions or feelings that cannot be objectively measured.