If a Firm Cannot Make a Profit Regardless of Output

question 68

Multiple Choice

If a firm cannot make a profit regardless of output volume, then:

• A)FC > VC.
• B)VC > FC.
• C)VC > R.
• D)BEP > VC.

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Definitions:

Current Liabilities

A company's debts or obligations that are due within one year.

Long-Term Liabilities

These are obligations or debts that are due to be paid out beyond one year in the future.

Current Liability

A liability that must be paid off within one year or the standard operating cycle of the company, whichever period is greater.

One Year

A period of twelve consecutive months used as a standard measure of time for accounting, budgeting, and financial reporting.