INSTRUCTIONS: Choose the Word or Phrase in [ ] Which

question 1

Multiple Choice

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Net worth is highest for those about [age 65 | age 85].

• A)for the first item
• B)for the second item
• C)if neither item will correctly complete the statement.

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Definitions:

Margin of Safety

Margin of Safety represents the difference between actual sales and break-even sales, indicating the amount by which sales can decrease before a business incurs a loss.

Break-Even Point

The point at which total costs equal total revenues, indicating that a business is not making a profit but also not incurring a loss.

Variable Cost

Costs that vary in direct proportion to changes in a business’s level of activity or volume of output produced, such as materials and labor.

Differential Cost

The difference in cost between two alternative decisions or scenarios.