Marguerite Is Reviewing a Project with Projected Sales of 1,400

question 59

Multiple Choice

Marguerite is reviewing a project with projected sales of 1,400 units a year,a cash flow of $39 a unit and project life of 3 years.The initial cost of the project is $94,000 and the discount rate is 14 percent.She has the option to abandon the project after one year at which time she feels she could sell the project for $63,000.At what quantity of annual sales should she be willing to abandon the project after the first year?

• A)899 units
• B)981 units
• C)967 units
• D)1,199 units
• E)1,006 units

Understand the structure and hierarchy of personnel in a law firm.

Identify the types of legal entities and their characteristics in the context of law firms.

Comprehend the benefits of working as a law clerk.

Understand the significance and implications of being a shareholder in a law firm.

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Definitions:

Variable Costing

A cost accounting method that includes only variable production costs in unit product costs, and treats fixed costs as period expenses that are charged against revenue in the period they are incurred.

Variable Costs

Costs that change in proportion to the level of goods or services a business produces.

Variable Costing

An accounting method that only includes variable production costs (costs that change with output level) in the cost of goods sold and inventory valuation.