A Maker of Kitchenware Is Planning on Selling a New

question 41

Multiple Choice

A maker of kitchenware is planning on selling a new chef-quality kitchen knife. The manufacturer expects to sell 1.6 million knives at a price of $120 each. These knives cost $80 each to produce. Selling, general, and administrative expenses are $500,000. The machinery required to produce the knives cost $1.4 million, depreciated by straight-line depreciation over five years. The maker determines that the EBIT break-even point for units sold and sale price is less than these estimates and that the EBIT break-even point for costs per unit, SG&A, and depreciation are greater than these estimates, so decides to go ahead with manufacturing the knife. Was this the correct decision?

• A) No, since the cost per unit should be greater than the EBIT break-even point for cost of goods if the project is to have a positive EBIT.
• B) Yes, since if the estimates for each parameter are correct, the EBIT will be positive.
• C) Yes, since a positive EBIT ensures that the project will have a positive net present value (NPV).
• D) It cannot be determined whether the decision was correct, since other factors contributing to the project's net present value (NPV), such as the upfront investment, have not been included in the analysis.

Identify the primary causes and risk factors for cancer, including lifestyle, genetics, and environmental exposure.

Describe the differences between benign and malignant tumors, including their growth, invasiveness, and potential for metastasis.

Recognize the significance of early detection and advances in treatment on the decline of cancer mortality rates.

Understand the specific cancers that have the highest incidence and mortality rates in the United States.

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Definitions:

Subsurface Mining

A method of extracting minerals and ores from beneath the earth's surface, as opposed to open-pit or surface mining, often requiring tunnels or shafts.

Disease

A disorder of structure or function in a living organism that typically leads to signs or symptoms and is not a direct result of physical injury.

Groundwater Supplies

Underground sources of fresh water stored in aquifers, crucial for drinking water, irrigation, and industrial uses.

Sulphur Content

The quantity of sulfur present in a material, which is significant in assessing air pollution potential, especially in fuels.