The Motor Works Is Considering an Expansion Project with Estimated

question 84

Multiple Choice

The Motor Works is considering an expansion project with estimated annual fixed costs of $71,000,depreciation of $38,500,variable costs per unit of $17.90 and an estimated sales price of $26.50 per unit.How many units must the firm sell to break-even on a cash basis?

• A)6,521 units
• B)8,256 units
• C)8,510 units
• D)9,667 units
• E)10,842 units

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Definitions:

Significance Level

The probability of rejecting the null hypothesis when it is actually true, usually denoted as alpha (α).

Null Hypothesis

The assumption for a statistical test that there is no association between two observed phenomena or no difference among groups.

Population

In statistics, this term refers to the entire group of individuals or instances about which you are interested in making conclusions.

Statistics

The science of collecting, analyzing, interpreting, presenting, and organizing data.