A Small Firm Builds Television Antennas

question 5

Short Answer

A small firm builds television antennas. The investment in plan and equipment is $200,000. The variable cost per television antenna is $500. The price of the television antenna is $1000. How many television antennas would be needed for the firm to break even?

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Definitions:

Deficit Financing

The practice of funding government spending through borrowing rather than through taxation, leading to a government deficit.

Interest Charges

The charge applied by a lender on a borrower for asset utilization, indicated as a percentage of the principal value.

CCC (Cash Conversion Cycle)

A gauge determining how long a company takes to convert investments in stock and other resources into cash flows from sales operations.

Working Capital Management

The management of a company’s short-term assets and liabilities to ensure its continued operation and maximize financial efficiency.