The Quorum Company Has the Following Cost Information on Its

question 32

Multiple Choice

The Quorum Company has the following cost information on its new prospective project. Calculate the present value break-even point.
Initial investment: $700
Fixed costs are $300 per year
Variable costs: $3 per unit
Depreciation: $100 per year
Price: $8 per unit
Discount rate: 12%
Project life: 3 years
Tax rate: 34%

• A) 80 units per year
• B) 95 units per year
• C) 139 units per year
• D) 144 units per year
• E) 152 units per year

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Definitions:

First-Line Supervisors

Managers who are directly responsible for overseeing the work of entry-level or non-managerial employees.

Middle Managers

Employees occupying positions between entry-level and top management, responsible for implementing organizational policies and overseeing junior staff.

Union-Free Organizations

Organizations that operate without the presence or influence of labor unions, where the employer and employees interact directly without union representation.

Major Changes

Significant modifications or alterations made to processes, systems, policies, or environments that impact the way things operate or function.