Use the Figure for the Question(s) Below

question 32

Multiple Choice

Use the figure for the question(s) below.
-The graph above shows the break-even analysis for the cost of making a certain good. Based on this chart, which of the following is true?

• A) The net present value (NP
• V) of the project increases with increased cost of goods sold.
• B) The project should not be undertaken if the predicted cost of goods sold is less than $110.
• C) The net present value (NP
• V) of the project will be positive if the cost of goods sold is greater than $110.
• D) If the good costs $110 to make, the net present value (NP
• V) of the project will be zero.

Recognize the importance of the percentage of sales approach and its requirements.

Identify the factors influencing sales forecasts in financial planning.

Understand key dimensions of financial planning: planning horizon and aggregation.

Grasp the concept of working capital decisions in financial planning.

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Definitions:

Globalization

The process by which businesses or other organizations develop international influence or start operating on an international scale.

WTO

World Trade Organization, an intergovernmental organization that regulates international trade by providing a framework for negotiating trade agreements and a dispute resolution process to enforce participants' adherence to trade agreements.

IMF

The International Monetary Fund, an international organization designed to ensure the stability of the international monetary system, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty.

Domestic Output

The total value of all goods and services produced within a country's borders in a specific time period, also known as Gross Domestic Product (GDP).