Everything Else Equal, a Firm Can Reduce Its Operating Breakeven

question 49

Multiple Choice

Everything else equal, a firm can reduce its operating breakeven point by:

• A)increasing its fixed costs.
• B)decreasing the selling price of its product.
• C)increasing its product's contribution margin.
• D)increasing its variable cost per unit.
• E)decreasing its earnings per share.

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Definitions:

After-tax Return

The profit from an investment after all taxes have been subtracted, indicating the net gain to the investor.

Time Horizons

The length of time over which an investment is expected to be held before it is liquidated, ranging from short-term to long-term periods.

Casualty Insurance

Insurance coverage for loss or liability stemming from a sudden, accidental event.

Equity Securities

Financial assets representing ownership interest in a company, such as stocks, which provide income through dividends and potential for capital gain.