Economic Growth, as Measured by Increases in Real Per-Capita GDP

question 22

Multiple Choice

Economic growth, as measured by increases in real per-capita GDP, exceeded 2% during the

• A)1950s, 1960s, 1970s and 1980s
• B)1980s, 1990s, 2000s and 2010s
• C)1960s, 1970s, and 1980s
• D)2000s and 2010s

Understand the basic principles of cost-volume-profit (CVP) analysis and its limitations.

Calculate and interpret the break-even point in units and dollars.

Apply sensitivity analysis to assess changes in profit related to variations in selling prices, costs, and volume.

Determine operating leverage and its impact on profits.

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Definitions:

Discount Rate

The interest rate charged to commercial banks and other depository institutions for loans received from the Federal Reserve's discount window; also used in discounted cash flow (DCF) analysis to determine present value.

NPV

A strategy employed in capital budgeting, Net Present Value is instrumental in determining the financial viability of an investment or project.

Projected Cash Flows

Estimates of the amounts of money a company expects to receive and pay out over a certain period in the future.

Market Test

An evaluation conducted to gauge the potential success of a product or service in the market, often via limited release or sample group feedback.