What Is the Maximum Percentage of Variable Costs in Relation

question 13

Multiple Choice

What is the maximum percentage of variable costs in relation to sales that a firm could experience and still break even with $5 million revenue,$1 million fixed costs,and $500,000 depreciation?

• A) 30 percent
• B) 70 percent
• C) 80 percent
• D) 90 percent

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Definitions:

Breakthrough Stage

A phase in development where significant and sudden progress or advance is made in understanding or innovation.

Entrepreneurial Firms

Companies that pursue opportunities, regardless of the resources they currently control, characterized by innovation, risk-taking, and proactiveness.

Investing Wisely

The process of allocating resources, typically money, in different financial instruments or assets with the aim of generating favorable returns while managing risks.

Flexible

The ability to adapt to changes and respond to varying needs and conditions with ease.