The Break-Even Level of Revenues Represents the Point at Which

question 54

Multiple Choice

The break-even level of revenues represents the point at which the firm has:

• A) zero pretax profit.
• B) zero net present value.
• C) covered all opportunity costs.
• D) covered all fixed and variable costs.

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Definitions:

Investment Center

A business unit within an organization that is responsible for its own revenue, expenses, and investments, and is evaluated based on its return on investments.

Revenues

The total income generated from normal business operations, before any expenses are deducted.

Profitability

Refers to a company's ability to generate earnings over its costs and expenses.

Controllable Margin

Controllable margin refers to the amount of profit or income that can be directly influenced by the management's decisions, usually excluding fixed costs and overhead.