If a Company Raises Its Price Per Unit, but Keeps

question 106

True/False

If a company raises its price per unit, but keeps total fixed cost and variable cost per unit the same, the break-even point will be lower.

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Definitions:

Principal Balance

The outstanding amount of a loan or mortgage that remains to be paid, not including interest.

Personal Loan

A type of unsecured loan provided by financial institutions based on the borrower’s creditworthiness without collateral.

Perpetuity

A type of annuity that continues indefinitely, often used in finance to model consistent payments or cash flows without an end date.

Compounding Period

The frequency with which interest is added to the principal balance of an investment, which can be annually, semiannually, quarterly, etc.