A Project Has a Contribution Margin of $3

question 416

Multiple Choice

A project has a contribution margin of $3.20, projected fixed costs of $9,400, projected variable costs per unit of $7.25, and a projected financial break-even point of 6,100 units. What is the
Operating cash flow at this level of output?

• A) $10,120
• B) $10,487
• C) $10,504
• D) $10,523
• E) $10,698

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Definitions:

Operating Activities

Transactions and events related to the primary business activities, such as selling products or services, which are reflected in the cash flows.

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments, not including cash equivalents.

Common Stock

A type of equity ownership in a corporation, representing claims on a portion of its earnings and assets, with voting rights on corporate matters.

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments, not including inventory, reported in the cash flow statement.