The Mini-Max Company Has the Following Cost Information on Its

question 53

Multiple Choice

The Mini-Max Company has the following cost information on its new prospective project. Calculate the present value break-even point.
Initial investment: $700
Fixed costs are $200 per year
Variable costs: $3 per unit
Depreciation: $140 per year
Price: $8 per unit
Discount rate: 12%
Project life: 3 years
Tax rate: 34%

• A) 68 units per year
• B) 75 units per year
• C) 84 units per year
• D) 114 units per year
• E) None of these.

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Definitions:

Hierarchy

A system or organization in which people or groups are ranked one above the other according to status or authority.

Centralization

The concentration of decision-making authority at the upper levels of an organization.

Specialization

The process of focusing on and becoming expert in a specific area of knowledge or activity.

Differentiation

The process of identifying and emphasizing the unique characteristics or features of a person, product, or organization.