Assume the Following Information: How Many Units Must Be Sold

question 73

Multiple Choice

Assume the following information: How many units must be sold to generate a before-tax profit of £45,000?

• A) 3,000 units
• B) 2,500 units
• C) 4,500 units
• D) 3,750 units

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Definitions:

Variable Cost

consists of costs that vary with the level of output, such as materials and labor costs, different from fixed costs.

NPV

Net Present Value; a financial metric used to assess the profitability of an investment by calculating the difference between the present value of cash inflows and outflows associated with the investment.

Default Chance

The probability that a borrower will fail to meet the obligations of a loan or debt.

Monthly Interest Rate

The percentage of a sum of money charged for its use per month, often used in reference to loans or credit balances.