Which of the Following Will Cause the EBIT Break-Even for Sales

question 63

Multiple Choice

Which of the following will cause the EBIT Break-Even for sales to increase?

• A)A decrease in the sales price.
• B)A decrease in depreciation expense.
• C)A decrease in selling,general,and administrative expenses.
• D)A decrease in the number of units sold.

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Definitions:

Leveraged Buyouts (LBOs)

Transaction in which a firm’s publicly owned stock is acquired in a mostly debt-financed tender offer, and a privately owned, highly leveraged firm results. Often, the firm’s own management initiates the LBO.

Private Equity Groups

Firms that invest in private companies, often acquiring significant or controlling stakes, with the intention of improving performance and increasing value before eventually selling the investment for a profit.

Borrowed Money

Funds that have been obtained through loans or debt, which typically incur interest charges and are required to be repaid.

Competitive Strategy

Approaches that a company adopts to gain an edge over its competitors, such as cost leadership, differentiation, or focus strategies.