Use the Figure for the Question(s)below

question 97

Multiple Choice

Use the figure for the question(s) below.
-A company planning to market a new model of motor scooter analyzes the effect of changes in the selling price of the motor scooter,the number of units that will be sold,the cost of making the motor scooter,the effect on Net Working Capital,and the cost of capital for the project.They predict that the break-even point for sales price for the motor scooter is $2480.What does this mean?

• A)If the motor scooter is sold for $2480,then the project will make a profit.
• B)If the motor scooter is sold for $2480,then the net present value (NP
• V)for the product will be zero.
• C)The predicted selling price of the motor scooter is $2480.
• D)The maximum that the motor scooter can sell for and still make the project have a positive net present value (NP
• V)is $2480.
• E)If the motor scooter is sold for $2480,the company will not go bankrupt.

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Definitions:

Factor Analysis

An analytical method in statistics that identifies the basic variables, or factors, explaining the correlation patterns seen within a group of observed variables.

Factors

In the context of statistics and experimental design, variables that are manipulated or measured to determine their effect on an outcome variable.

Outcomes

The possible results or consequences of an experiment or study.

MANOVA

Multivariate Analysis of Variance, a procedure for comparing multivariate sample means across groups.