The Mini-Max Company Has the Following Cost Information on Their

question 11

Multiple Choice

The Mini-Max Company has the following cost information on their new prospective project. Fixed costs are $200/year. (Initial investment is $700) .
Variable costs: $3/unit.
Depreciation: $140/year.
Price: $8/unit.
Discount rate: 12%.
Project life: 5 years.
Tax rate: 34%.
Calculate the accounting break-even point.

• A) 68.00 units/year.
• B) 103.03 units/year.
• C) 113.33 units/year.
• D) 25.00 units/year.

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Definitions:

Per-Unit Subsidy

A financial incentive given by the government, reducing the cost of each unit of a good or service to either the producer or consumer.

Profit Maximization

A business objective to achieve the highest possible profit from operations, often by adjusting production, prices, and other variables.

Competitive Industry

An industry structure where many firms compete for market share, with no single company dominating the market.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good that consumers are willing to buy.