An 8 Year Project Is Estimated to Produce a Product

question 12

Multiple Choice

An 8 year project is estimated to produce a product with the following information: selling price = $80 per unit; variable costs are $65 per unit; fixed costs are $20,000; required return is 10%; initial investment = $200,000.Calculate the accounting break-even.

• A)3,000
• B)3,833
• C)4,000
• D)4,833

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Definitions:

Passengers

Individuals who are being transported from one place to another in a vehicle, aircraft, or vessel, usually for a fare.

Plane Operating Costs

Expenses associated with operating an aircraft, which include fuel, maintenance, crew salaries, and landing fees among others.

Tenant-Days

A metric that represents the total number of days that all units in a property were occupied over a specific period.

Revenue Variance

The difference between actual revenue and budgeted or expected revenue.