If Fixed Costs Are $600,000 and the Unit Contribution Margin

question 85

Multiple Choice

If fixed costs are $600,000 and the unit contribution margin is $40, what is the break-even point if fixed costs are increased by $90,000?

• A) 17,250
• B) 15,000
• C) 8,333
• D) 9,667

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Definitions:

Residual Value Guarantee

A commitment to ensure that an asset will have a specified value at the end of its lease term.

Present Value

The present value of a future amount of money or series of cash flows, calculated using a given interest rate.

Minimum Lease Payments

The lowest amount that a lessee is expected to pay over the lease term for the right to use an asset.

Current Ratio

The current ratio is a liquidity metric that evaluates a company's ability to pay off its short-term liabilities with its short-term assets.