Preparing a CVP or Break-Even Chart Under Various Assumptions Using

question 16

Multiple Choice

Preparing a CVP or break-even chart under various assumptions using a spreadsheet is:

• A)worthwhile.
• B)necessary.
• C)unhelpful.
• D)expensive.

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Definitions:

Current Cost

The cost that would be incurred to replace an asset or settle a liability at the current time.

Useful Life

The estimated duration of time that an asset is expected to be usable for its intended purpose.

Imputed Interest Charge

An estimated interest rate used in transactions where no interest or an unrealistic interest rate is charged.

Equity Funds

Mutual funds that invest predominantly in stocks or equities, aiming for long-term capital growth.