Given the Following Information, What Is the fiNancial Break-Even Point

question 133

Multiple Choice

Given the following information, what is the financial break-even point? Initial investment = $300,000; variable cost = $120; fixed cost = $65,000; price = $150; life = six years; required return =
10%; depreciation = $50,000. Ignore taxes.

• A) 1,392 units
• B) 2,600 units
• C) 4,167 units
• D) 4,463 units
• E) 5,561 units

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Definitions:

Equity Method

An accounting technique used by companies to record their investments in other companies, where the investment gives the investor significant influence over the investee, but not control or full ownership.