A Project That Has an IRR Equal to ______ Just

question 359

Multiple Choice

A project that has an IRR equal to ______ just breaks even on an accounting basis.

• A) Its required return.
• B) Its AAR.
• C) 0 %
• D) 100 %
• E) -100 %

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Definitions:

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit. This metric indicates how much each unit sold contributes to fixed costs and profit.

Cost-Volume-Profit Analysis

A management accounting method used to understand the relationship between costs, sales volume, and profit at various levels of production.

Variable Costs

Financial outlays that adjust based on the volume of production or sales, for instance, materials and workforce expenses.

Fixed Costs

Costs that do not change with the level of output or production volume, such as rent, salaries, and insurance premiums.