How Is the Break-Even Point Represented Graphically

question 17

Multiple Choice

How is the break-even point represented graphically?

• A)the intersection of total costs and total revenue lines.
• B)starting at zero and increasing as a straight line as activity increases.
• C)starting at a given point and increasing as a straight line as activity increases.
• D)a horizontal line, staying the same irrespective of the level of activity.

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Definitions:

Cumulative Preferred

Cumulative preferred stock is a type of preferred stock that has a provision entitling shareholders to accumulate unpaid dividends to be paid out before any dividends can be issued to other stock classes.

Par Common Stock

The face value of common stock as designated in the company's charter, not necessarily its market value.

Dividends

Dividends are a portion of a company's earnings that are distributed to shareholders as a reward for their investment.

Depreciation Expense

The allocation of the cost of a tangible fixed asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.