Assume a Project with a Life of One Year Has

question 92

Multiple Choice

Assume a project with a life of one year has projected depreciation of $720,fixed costs of $6,000,and total sales of $11,760 at a sales quantity of 300 units.The variable cost per unit is $17.40.What is the accounting break-even level of production?

• A)309 units
• B)301 units
• C)292 units
• D)298 units
• E)312 units

---

Definitions:

Equity

An ownership interest. The portion of a firm’s capital representing funds belonging to its shareholders. An equity investment is an investment in stock.

Capital Components

The various sources of funding that a company uses to finance its operations and growth, including debt and equity.

Capital Structure

The mix of the three capital components (debt, preferred stock, and equity) used by a firm. The optimal capital structure is the structure at which stock price is maximized, all other things held equal. Also see Target capital structure.

Equity

The value of an ownership interest in property, including shareholders' equity in a company.