Once a Business Is Operating Beyond the Break-Even Point, Why

question 70

Essay

Once a business is operating beyond the break-even point, why doesn't each additional dollar of revenue add a dollar to net income?

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Definitions:

Reinvestment

The process of using the proceeds from an investment to purchase additional assets or securities in order to potentially increase wealth.

Self-Dealing

Any instance in which directors or officers make decisions that violate their corporate duty of loyalty.

Duty of Loyalty

An agent’s obligation to act in the interest of the principal.

Fifth Amendment

An amendment to the US Constitution that provides several rights to individuals, including protection against self-incrimination and double jeopardy.