The NPV of Project B Is Closest To

question 36

Multiple Choice

The NPV of project B is closest to:

• A)12.6
• B)23.3
• C)12.0
• D)15.0

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Definitions:

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed to variable costs in a company's cost structure.

Break-even Point

The point at which total revenues equal total costs, resulting in neither profit nor loss.

Variable Cost

Costs that vary depending on the amount of goods produced or the scale of operations in a business.

Fixed Costs

Expenses that do not change with the level of goods or services produced by a business within a certain period, such as rent, salaries, and insurance.