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:

Financial Statement

A Financial Statement is a formal record of the financial activities and position of a business, person, or other entity, including income statements, balance sheets, and statements of cash flows.

Normal Balance

The usual balance of an account in the accounting system, where asset and expense accounts typically have a debit balance, and liability, equity, and revenue accounts have a credit balance.

Discount Period

The timeframe within which a buyer can take advantage of a discount for paying an invoice early.

F.O.B Shipping Point

Free on Board Shipping Point, a term indicating that the buyer takes responsibility for goods the moment they leave the seller's premises.