Waybelow Normal University Has Found It Necessary to Institute a Crime-Control

question 75

Multiple Choice

Waybelow Normal University has found it necessary to institute a crime-control program on its campus to deal with the high costs of theft and vandalism.The university is now considering several alternative levels of crime control.This table shows the expected annual costs and benefits of these alternatives. Refer to the above information.The marginal benefits of crime control for Level Two are:

• A) $20,000.
• B) $40,000.
• C) $60,000.
• D) $140,000.

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Definitions:

Net Present Value

The disparity between cash inflows' present value and cash outflows' present value through a certain time frame, utilized to determine an investment's profitability.

Fixed Costs

Costs that do not change with the level of output or sales, such as rent, salaries, and insurance premiums.

Cash Break-even Point

The point at which a business's cash inflows equal its cash outflows, excluding financing.

Degree of Operating Leverage

A ratio that quantifies the sensitivity of a company's operating income to its sales, demonstrating the impact of fixed and variable costs on profitability.