A 4 Year Project Is Estimated to Produce a Product

question 25

Multiple Choice

A 4 year project is estimated to produce a product with the following information: selling price = $57 per unit; variable costs are $32 per unit; fixed costs are $9,000; required return is 12%; initial investment = $18,000.Calculate the financial break-even.

• A)597
• B)540
• C)525
• D)490

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Definitions:

Consolidated Equity

The total amount of owners' or shareholders' equity in a conglomerate, after all inter-company balances and transactions have been eliminated in consolidation.

Financial Statements

Official records that detail the financial activities and condition of a business, organization, or individual, typically including balance sheet, income statement, and statement of cash flows.

Retained Earnings

The portion of a company's profits kept in the business after dividends are paid to shareholders, used for reinvestment or to pay off debt.